Preamble

The House met at a Quarter before Three of the Clock, Mr. SPEAKER in the Chair.

Oral Answers to Questions — ALLIES' WAR AIMS.

Mr. Hannah: asked the Prime Minister whether in view of Dr. Goebbels' official declaration that the Allies do not conceal that it is their goal to bring Germany down, to dismember and divide her as a nation, he will take further steps to make known to the German people, and the world in general, the reasons for our entry into the war and our peace aims?

The Under-Secretary of State for Foreign Affairs (Mr. Butler): The reasons for our entry into the war and the purposes for which we are fighting have been frequently stated by the Prime Minister and by other members of His Majesty's Government. I would refer my hon. Friend, in particular, to the Prime Minister's speech at the Mansion House on the 9th January and to a speech by my Noble Friend, the Secretary of State for Foreign Affairs, at Leeds on 20th January, which show that Dr. Goebbels' declaration is a fantastic and malicious invention which could only be put forward for home consumption.

Sir Patrick Hannon: asked the Parliamentary Secretary to the Ministry of Information what is the extent and quality of the organisation which is operative in South America for the presentation of the war aims of Great Britain and her Allies to the various South American Republics?

The Parliamentary Secretary to the Ministry of Information (Sir Edward Grigg): In eight of the 10 South American Republics, the Ministry of Information has Press Attaches, each of whom has a staff proportionate to the

needs of his post, and whose function it is to see that the British case is effectively presented by all available means. They work under the general supervision of His Majesty's Diplomatic representatives. The amount of work to be done in the two remaining Republics, Paraguay and Ecuador, has not justified the appointment of full-time resident Press Attaches. The work in the former is done from Buenos Ayres, and that in the latter by an officer of rank below Press Attache.

Sir P. Hannon: Is my hon. Friend keeping in mind the intensity of the propaganda which is being conducted in the interests of the enemy, and is he taking steps to advise our representatives in South America how important it is to counteract the efforts made by Germany in this respect?

Sir E. Grigg: Yes, I can give my hon. Friend a complete assurance on that point.

Oral Answers to Questions — PEACE TERMS (VATICAN PRONOUNCEMENT).

Mr. Mander: asked the Prime Minister whether any communication has been, or will be, addressed to the Vatican on the subject of the address given by the Pope to the College of Cardinals, on Christmas Eve, setting out five points that would have to be provided for in connection with any peace settlement?

Mr. Butler: No, Sir, but I am glad to take this opportunity of saying that His Majesty's Government have been deeply impressed by this and other recent pronouncements from the Vatican.

Oral Answers to Questions — ROYAL AIR FORCE.

SENIOR WOMAN MEDICAL OFECER.

Sir Francis Fremantle: asked the Secretary of State for Air whether he will consider the advisability of appointing a senior woman medical officer to assist in meeting the needs of the large numbers of women employed uncle his Department?

The Secretary of State for Air (Sir Kingsley Wood): The services of the Royal Air Force medical organisation are available for the Women's Auxiliary Air Force and the question of appointing women medical officers at stations where


large numbers of Women's Auxiliary Air Force personnel are posted is under consideration. It is not at present considered necessary to appoint a senior woman medical officer.

Sir F. Fremantle: Would it not be advisable, when junior women medical officers have been appointed, that a senior woman medical officer should also be appointed and would not this assist the right hon. Gentleman in deciding what is best from the female point of view?

Sir K. Wood: I will examine the matter when the question of this other personnel is being considered.

Dr. Edith Summerskill: Will the Minister assure the House that he will give favourable consideration to this matter, because there are certain diseases from which women suffer and for which it is very important, during war time, that there should be full information, and these women are reluctant to approach a male medical officer? I think it is in the interests of the Royal Air Force that these women doctors should be appointed.

Sir K. Wood: I will, of course, take the question into consideration, but I hope the matter will be met by the appointment of women medical officers at the various stations.

AERODROME, NORTH DEVON.

Sir Richard Acland: asked the Secretary of State for Air what stage has now been reached in the negotiations for the acquisition of the site of an aerodrome in North Devon?

Sir K. Wood: Negotiations have been opened with a view to the purchase of the site, and, following a recent meeting with an Air Ministry Valuer, the owners and occupiers are now preparing their claims. A further meeting is being arranged with a view to expediting a settlement.

Oral Answers to Questions — POST OFFICE.

FRANCO-BRITISH POSTAGE STAMPS.

Mr. Mander: asked the Postmaster-General whether he will consider consulting the French Government with a view to issuing, in association with that Government, a Franco-British postage stamp, with a design of two figures representing

France and Great Britain, as a sign of the unity of the two countries?

The Postmaster-General (Major Tryon): Arrangements have been made to issue a special series of stamps in May next to commemorate the centenary of the first adhesive postage stamp, and in the circumstances I am unable to consider the issue of another special stamp at the present time.

Mr. Mander: Will the Postmaster-General bear in mind the suitability of a stamp similar to that which was issued by the French Government on the occasion of the King's visit to Paris representing the Houses of Parliament and the Arc de Triomphe?

Major Tryon: I will bear that in mind.

Mr. Mander: Will the Minister be prepared to consider representations from representative bodies, both French and British, in this matter?

Major Tryon: Certainly; if representations are made I shall be happy to take them into consideration.

PENSIONERS, SCOTLAND (WAGES).

Mr. Woodburn: asked the Postmaster-General why certain Post Office pensioners in Scotland who have returned to service for the present emergency, in addition to surrendering temporarily their pension, should be deprived of the 5s. 6d. per week increase payable to their grade under the decision of October, 1938; and will he take steps to see that such pensioners are placed on wages conditions not less favourable than the best for their grade?

Major Tryon: The conditions of service for Post Office pensioners in Scotland who accept re-employment during the present emergency are those laid down by the Treasury for re-employed Civil Service pensioners generally. I am sending the hon. Member a copy of a reply on the same subject given on the 9th October by my right hon. and gallant Friend the Financial Secretary to the Treasury to the right hon. Member for East Edinburgh (Mr. Pethick-Lawrence).

Mr. Woodburn: Is the Postmaster-General aware that these men feel that if they are already doing full-time work with what is equivalent to half wages it is an additional hardship if men working


alongside are paid the 5s. 6d. increment which is not given to these older servants of the community?

Major Tryon: That is a matter for the Treasury, as it affects the whole Civil Service.

TELEVISION.

Sir Reginald Clarry: asked the Postmaster-General what is the present situation with regard to television broadcasting in this and other countries; and whether he will consider an early resumption of television broadcasting, as an encouragement both to research work and to manufacturers of television sets, enabling them to establish a British product in world markets?

Major Tryon: The television service from the Alexandra Palace was suspended, in the national interest, on the outbreak of war; and I am sorry that I can hold out no hope of its early resumption. I understand that television services are being conducted in a few other countries, but I have no information which would suggest that they have yet passed the experimental stage.

FOOTBALL POOLS.

Mr. Robert Gibson: asked the Postmaster-General what were the financial arrangements made with Unity Pools, Limited; and what is the cost of the arrangement to the State apart from the cost of collecting letters containing coupons and transmitting them to the 34 regional offices?

Major Tryon: No financial arrangements have been made with Unity Pools and no costs are incurred apart from the ordinary costs of handling letters in the post. Letters addressed to Unity Pools at any of the regional offices are prepaid at the letter rate of postage and transmitted and delivered to the Unity Pools agent at the town of address in ordinary course of post.

Mr. Gibson: Is the Postmaster-General aware that Members of this House have been circularised with a copy of a letter which is said to have been sent to the right hon. and gallant Gentleman dated 23rd January? Is it the case that the right hon. and gallant Gentleman

accepted a scheme in terms of which certain persons publish their coupons in millions of newspapers at the public expense? Is that statement correct?

Major Tryon: I have never heard of any such statement, and it is absolutely incorrect. What we have done is to object to the posting of outward blank coupons because they overwhelm the Post Office staff with work when they have more urgent matters in hand.

GOVERNMENT CONTRACTS (LOCAL FIRMS).

Mr. A. Jenkins: asked the First Commissioner of Works whether his attention has been called to the large number of Government contracts in Wales and Monmouthshire which have been given to firms from other areas, while the organisation, equipment, and often the personnel of local contractors are unemployed; and will he see to it that in future in all cases when costs are equal local firms are given the first opportunity of carrying out Government work?

The First Commissioner of Works (Mr. Ramsbotham): The policy of my Department with regard to the employment of local contractors was explained on Thursday last in reply to a Question by the hon. Member for East Rhondda (Mr. Mainwaring). As regards the last part of the Question, I can give the assurance that, cost and all other considerations being equal, a local firm will always be selected.

Sir Robert Bird: asked the First Commissioner of Works whether lie is aware that at the present time the construction of Government buildings in the districts of Wolverhampton, South Shropshire and South Staffordshire is carried out by contractors outside this area, whilst local firms have been generally ignored, and that the local building trade, through their association, have declared they possess the necessary facilities for handling all this Government work and therefore claim they should be given opportunities to tender for it; and will he give these firms this opportunity?

Mr. Ramsbotham: I do not think that my hon. Friend's criticisms can apply to contracts let by my Department. Invitations to tender for two substantial contracts only in the area mentioned have


been issued since the outbreak of war and seven tenders were received in each case. In one instance, all were from firms in the neighbourhood and one received the contract. In the other case, three were from firms in the same town, three were from firms in towns within a fifty miles radius, and one from a firm established at a greater distance. The last was accepted because the price was lowest.

Sir P. Hannon: Who is responsible for these contracts? Is it not the fact that contracts are being fixed with firms enormous distances away from the site of the works? Is anything being done to bring local contractors into play in these cases?

Mr. Ramsbotham: I can only answer for contracts made by my own Department.

Oral Answers to Questions — ROYAL NAVY.

ADMIRALTY (APPOINTMENTS AND PROMOTIONS).

Mr. Creech Jones: asked the First Lord of the Admiralty whether the Honourable E. L. Chatfield, who was appointed to be a temporary clerk in the Admiralty, registered at a Ministry of Labour Employment Exchange in accordance with the Government's regulations in order to obtain his appointment, and if so, at what Employment Exchange he registered; whether his subsequent promotion to the administrative class within a week or so of his initial appointment was made in accordance with the promotion board procedure in operation in the Admiralty; and what steps he is taking to allay the grave discontent that exists amongst the experienced permanent staff in tile Admiralty who, after many years of service, remain unpromoted and who are now junior to this newly-appointed officer?

The First Lord of the Admiralty (Mr. Churchill): In the transition from peace co war it is necessary to make considerable temporary expansions of the Admiralty staff, as indeed of the staffs of ill other Services, and these cannot be filled even mainly from the permanent and pensionable staff. The normal promotion board machinery has been suspended for the period of the war, and in any case is not applicable to tem-

porary appointments and promotions. Mr. Chatfield is one among a considerable number of persons brought in to the Admiralty from outside as temporary administrative officers. The only difference I can discern between his case and that of the five other persons similarly appointed is that on the day before the outbreak of war he succeeded in obtaining an appointment as a temporary clerk. He had already served in the Royal Navy as a cadet and midshipman for three years before being invalided. Thereafter he had joined the Territorial Army and was again invalided. He therefore sought to serve in a clerical capacity, that being the only one which the state of his health permitted.
It is regretted that in the stress of the hours preceding the declaration of war the process of registering at an Employment Exchange was omitted. I cannot see that these facts constituted any bar to his being selected with five others for appointment to his present temporary rank. On the contrary the zeal shown by the applicant and the fact that his abilities and his work were found satisfactory in a subordinate grade were elements which justified his appointment to a higher grade with others who had not gone through this trial procedure. The reports about his work in both grades are good. There is no grave discontent among the experienced permanent staff in the Admiralty which it is my duty to allay; and I am sure that the respect in which Mr. Chatfield's name is held in that Department has proved in no way prejudicial to the public interest.

Mr. Creech Jones: May I ask what were the special qualifications of this man to perform this particular type of work? May I also ask what is the procedure which has been established to deal with this type of appointment, and why in this case the procedure of registration was not utilised? May I ask further why it is that a junior and temporary person is permitted to come into the Admiralty and to assume seniority over long-established and senior persons, and whether this sort of thing does not undermine public confidence?

Mr. Churchill: I took a great deal of pain to give a very full answer to the hon. Gentleman, whose Question raised public issues of importance. I prepared the answer with my own hand, and I


do not mind saying that I was very well satisfied with it. If I were to attempt to embellish it at the moment, I should only spoil it.

Mr. Shinwell: It is most unsatisfactory.

WOMEN OFFICERS (PAY AND ALLOWANCES).

Mr. Parker: asked the First Lord of the Admiralty what are the prevailing rates of pay and allowances for women officers, including payments for lodging,

—
If provided with accommodation and food.
If not provided with accommodation and food.
Allowances for







Lodging.
Provisions.


Superintendent
…
…
£500 a year
£400 a year
£80 a year
£47 9s. a year


Chief Officer
…
…
£350 a year
£260 a year
£80 a year
£47 9S. a year


First Officer
…
…
£200 a year
£130 a year
£80 a year
£47 9s a year


Second Officer
…
…
£150 a year
£110 a year
£60 a year
£47 9s. a year


Third Officer
…
…
£130 a year
£75 a year
£60 a year
£47 9s. a year

No allowances are payable for fuel and light, servants or camp kit.

Officers of the W.R.N.S. come under the same regulations as naval officers as regards travelling expenses and when absent on duty receive subsistence allowance as follows:


—
Absent a night or 24 hours.
Absent 9 hours and not absent one night.
Above 5 but under 9 hours.



£
s.
d.
s.
d.
s.
d.


Superintendants
1
5
0
12
6
5
0


Chief Officers

18
9
9
4
3
9


First Officers



Second Officers

15
0
6
3
2
6


Third Officers

Previous to 18th January, 1940, the following rates of pay were in force:


Superintendent
£365 a year.


Chief Officer
£275 a year.


First Officer
£240 a year.


Second Officer
£210 a year.


These rates were subject to a deduction of £75 a year for hoard, lodging, laundry, fuel and light in the case of officers provided with accommodation.

1922 COMMITTEE (CABINET MINISTERS' STATEMENTS).

Mr. John Morgan: asked the First Lord of the Admiralty whether he will

fuel and light, travelling, subsistence, servants, camp kit, rations, and any other allowance; and what were the previous payments where any change has taken place since the outbreak of the war?

The Parliamentary Secretary to the Admiralty (Mr. Shakespeare): As the answer involves a number of tables of figures I will, with the hon. Member's permission, circulate it in the OFFICIAL REPORT.

Following is the information:

disclose to this House information which, at a secret meeting of Conservative Members of this House held recently, he disclosed with regard to naval matters and operations which would prove of interest and inspiration if given to the House of Commons as a whole?

Mr. Churchill: I would refer the hon. Member to the reply which the Prime Minister gave yesterday to my hon. Friend the Member for East Fife (Mr. Henderson Stewart). I hope to continue the practice of making from time to time full statements to the House on the progress of the war at sea.

Mr. Morgan: May I take it from the answer that the right hon. Gentleman will be prepared to meet Members on this side of the House under conditions similar to those under which he meets Members on the other side, and on a similar status?

Mr. Churchill: If I received an invitation, I should have the greatest pleasure in complying with it.

RAFTS AND LIFEBELTS.

Mrs. Adamson (for Mr. Adamson): asked the First Lord of the Admiralty (1) whether he has considered the adoption of additional floating rafts on naval vessels to safeguard the lives of shipwrecked crews; and whether he has approved of any type of automatic light


to be fixed on the rafts so that their position may be observed during the hours of darkness and thereby assist in being rescued;
(2) whether he has given consideration to the adoption on all naval vessels of a lifebelt light which automatically indicates the position of shipwrecked members of the crew; and whether, in view of the risk in the use of searchlights to locate floating bodies, he will institute the use of such a device to assist in the protection of the lives of naval service men during the period of darkness?

Mr. Shakespeare: The whole process of improving and multiplying life-saving appliances and fittings, including the provision of additional floating rafts and some form of light indicators, is being continually pressed forward as the war unfolds.

Mrs. Adamson: In view of the great concern that is felt, will the hon. Gentleman give an assurance that the matter will be expedited?

Mr. Shakespeare: Yes, it is constantly under review.

HOUSES OF PARLIAMENT (LIGHTING).

Mr. Glenvil Hall: asked the First Commissioner of Works whether he will take steps to improve the lighting in the Central Lobby, when the House is sitting, during the black-out hours?

Mr. Ramsbotham: I regret that, owing to the very large area of the stained glass windows, it would be a matter of considerable difficulty and expense to provide more light while maintaining an effective black-out.

Mr. Hall: Does not the First Commissioner of Works think that it is worth the cost? Is he aware that it is impossible to recognise anyone in the Central Lobby; that it is undignified that people should have to go there, and very unfair to the officers on duty?

Mr. Ramsbotham: I have had conversations with the Air-Raid Precautions Committees of both Houses, and in view of the difficulty and expense, to which I have referred, it is not possible to come to any other arrangements. If the hon.

Member has any suggestion to make I shall be glad to consider it.

Mr. Garro Jones: Can the First Commissioner say the total amount of cost which is held to offset the enormous advantage which would accrue to hon. Members and their visitors by making the Central Lobby a place where they can conveniently meet?

Mr. Ramsbotham: I cannot give the exact figure but I will go into it and let the hon. Member know.

Lieut.-Colonel Sir Thomas Moore: Cannot the lights be put about 12 feet higher than they are? That would give sufficient light for hon. Members to see who was coming to visit them.

Mr. Ramsbotham: I will have that point examined.

Mr. G. Strauss: Can the First Commissioner tell us what would be the total cost?

SINGAPORE (LABOUR DISPUTES).

Mr. Creech Jones: asked the Secretary of State for the Colonies what are the causes of the labour dispute in Singapore; what steps have been taken to remove the workers' grievances; whether any persons are being victimised or prosecuted for their part in the dispute; and what conciliation machinery exists for dealing with labour difficulties?

The Secretary of State for the Colonies (Mr. Malcolm MacDonald): As the answer is necessarily long I will, with the hon. Member's permission, circulate it in the OFFICIAL REPORT.

Mr. Creech Jones: Is it a fact that all strikes in Singapore at the present time are illegal, and under what emergency powers have the Government been acting to break this strike?

Mr. MacDonald: My information is that practically all the strikes which have taken place at Singapore have been amicably settled, and therefore, the hon. Member's Questions do not arise.

Following is the reply:

The cost of living in Singapore has risen since the outbreak of war, and this has provided a genuine economic basis for recent claims on behalf of labourers.


There is reason to suspect that subversive elements unfriendly to this country are attempting unscrupulously to exploit this position.

All public authorities have awarded, with effect from 1st November, a cost of living allowance, to be revised monthly in accordance with changes in the cost of living; it has been twice raised in subsequent months. Most other employers have adopted a similar policy; but in some cases employers have refused to negotiate on demands considered extravagant. In one or two disputes workmen have been dismissed by employers; but the Governor informs me that such a course has been strongly disapproved by the Government. Eleven persons have had to be arrested after warning that interruption of work in the essential service of the Dockyard was an offence against Defence Regulations, and six others were arrested for throwing bottles at the police.

The officers of the Chinese Secretariat and the Labour Department of the Straits Settlements Government have great experience of conciliation in labour disputes. Workers have long been accustomed to invoke their assistance, and a very large measure of success has been secured by their efforts in the recent disputes, almost all of which have now been settled, including the strike of the mechanics employed by United Engineers. Trade union legislation on approved lines and legislation to provide machinery for the settlement of industrial disputes is now in process of enactment by the Straits Settlements legislature.

PALESTINE (TEL-AVIV PORT).

Mr. T. Williams: asked the Secretary of State for the Colonies the amounts received by the Palestine Government last year in wharfage dues, storage dues and lighterage licence fees from the Tel-Aviv port; and the amounts received by the Marine Trust, Limited, from the Palestine Government for maintaining the services of the lighter jetty?

Mr. M. MacDonald: I have not the information asked for, but am asking the High Commissioner for the figures and will communicate them to the hon. Member when I hear from him.

Mr. Williams: When the right hon. Gentleman does communicate with me,

will he state on what basis they justify the collecting of these dues, seeing that no payment is made to the Marine Trust for the maintenance of the jetty; and will he state further if these dues and fees are collected whether the Marine Trust makes a loss or not?

Mr. MacDonald: I will give what information I can on both those points.

Oral Answers to Questions — TRANSPORT.

NATIONAL ORGANISATION.

Mr. Ellis Smith: asked the Minister of Transport what steps he has taken or proposes to take to mobolise a national transport system, to include all forms of transport, co-ordinated for the purpose of utilising it to the best advantage, and, in the event of a sudden strain or breakdown in any form of transport, is he satisfied that alternative mid adequate transport is available and ready to be used at once?

The Minister of Transport (Captain Wallace): I think the present system provides a combination of elasticity and control which makes the best use of the different means of transport available. The Regional Transport Commissioners' organisations are largely designed to secure the provision of adequate alternative means of transport in case of sudden strain or breakdown. The whole system is kept under constant scrutiny and I shall not hesitate to introduce any changes which would appear to make for still better co-ordination.

RAILWAYS, CANALS AND WATER WAYS.

Mr. E. Smith: asked the Minister of Transport what action he intends to take to increase the volume of tonnage carried on the canals and waterways, in view of the great potential carrying capacity of the canals?

Sir P. Hannon: asked the Minister of Transport whether any definite scheme of co-operation between railways and canals, in dealing with the problem of heavy transport during the war, is in process or is contemplated in the near future; and whether facilities for inland water transport are being fully employed?

Captain Wallace: I am in close touch with the canal industry and am examining with them what additional contribution inland waterways can make towards the


solution of our national transport problems, and what further practical steps the Government can take towards arranging that the traffic which can best be carried by canal is so carried. The Canal (Defence) Advisory Committee, which is having a further meeting this afternoon, includes representatives of the waterways and canal carriers together with representatives of the various Departments concerned in getting traffic moved.

Sir P. Hannon: Is my right hon. and gallant Friend aware of the immense services rendered by canals during the last war, in the transport of heavy materials especially, and will he give sympathetic consideration to the proposals submitted to him this afternoon?

Captain Wallace: Any proposals submitted this afternoon or at any other time will be most carefully examined.

Mr. John Wilmot: Is the right hon. and gallant Gentleman aware that at this very time valuable canals are being allowed to fall into disrepair and become useless?

Captain Wallace: I think there are cases where that happens.

GAS AND STEAM VEHICLES (DRAFT REGULATIONS).

Mr. E. Smith: asked the Minister of Transport whether it is proposed to issue new regulations in regard to vehicles covered by the Gas and Steam Vehicles (Excise Duties) Bill, and to make any changes in the speed limit, etc., when the vehicle obtains the motive power from a plant carried on a trailer; and can a statement be made on this matter?

Captain Wallace: I circulated draft regulations to representative organisations on 15th January and asked for their early observations. I hope to receive the outstanding replies in the course of the next few days and shall consider them before finally making the regulations. I am sending the hon. Member a copy of the draft regulations.

ANGLO-TURKISH TRADE AGREEMENT.

Sir Granville Gibson: asked the Parliamentary Secretary to the Board of Trade whether he is aware that under the arrangement for funding and clearing arrears of payments clue to the United

Kingdom firms by traders in Turkey, it is proposed to settle these debts subject to discounts varying from 3 to 40 per cent.; whether United Kingdom creditors were consulted before these discounts were agreed to and under what authority His Majesty's Government have deprived United Kingdom creditors of a percentage of the debts due to them; and whether it is the intention of the Government to pursue this policy in the future with respect to debts due to United Kingdom firms from other countries, in view of the effect of such forcible reduction of a debt without consultation with the creditors, on exporters of the country and on our export trade?

Mr. R. S. Hudson (Secretary, Overseas Trade Department): The answer to the first part of the Question is in the affirmative. For the rest, I would ask my hon. Friend to await the full explanation I hope to give when the Motion confirming the Order comes up for Debate next week.

Sir G. Gibson: While thanking my right hon. Friend for his reply, may I ask him whether it is not possible to say one or two words at this juncture, in order to allay the feeling of consternation among exporters in this country in respect of the publication of the recently-signed Anglo-Turkish Agreement?

Mr. Hudson: This is a very complicated question with a very long history behind it, and I do not think that I could possibly give an adequate explanation within the terms of a Parliamentary answer.

Mr. Mender: Can we not have an assurance that, in future, persons interested shall be, at any rate, consulted before an agreement of this kind is made?

Mr. Hudson: The hon. Member must not assume that they are not.

Mr. Wilmot: Will the Minister bear in mind the fact that these discounts are rendering no advantage either to the exporter or to the purchaser, since they are payable to financial agents and moneylenders and go-betweens?

Mr. Hudson: I do not think I could accept that implication either. Perhaps the hon. Member will develop his views in the Debate next week.

STATUTORY RULES AND ORDERS (PUBLICATION).

Sir G. Gibson: asked the Financial Secretary to the Treasury whether he is aware that announcements relating to Statutory Rules and Orders are being issued in the Press before the actual copies of the Orders in print are available; that on 13th January reference was made in the Press to the maximum prices for home-grown oats, but that the official order relating thereto is not yet available; that the new Order relating to lights on motor vehicles which came into operation on 22nd January is not yet available in print; that great inconvenience is caused to the commercial community owing to the delay in obtaining official copies of these Orders; and whether he will arrange that printed copies of all Statutory Rules and Orders shall be available simultaneously with any announcements regarding them appearing in the Press?

The Financial Secretary to the Treasury (Captain Crookshank): I think my hon. Friend is under some misapprehension. The Home Grown Oats (Control and Maximum Prices) Order, to which I assume my hon. Friend refers, was made by my right hon. Friend on 27th January last and was sent to the Stationery Office for printing in the afternoon of the same day. Copies of the Order which will come into force on 1st February next were issued for sale on 30th January. As regards the Lighting (Restrictions) Order, 1940, copies of this Order, which came into operation at midday on 22nd January, were on sale at the opening of business on that morning and have been available ever since.
I may add that every effort is made to ensure that copies of Orders should be available to the public as soon as possible after the making of them is announced in the Press, but it is not always possible to arrange that printed copies should be on sale simultaneously with the Press announcement. In the case of the Home Grown Oats Order, however, the Press announcement of 13th January was expressly made as a preliminary notice of an Order which my right hon. Friend intended to make in the near future.

Sir G. Gibson: Is it not a fact that the contents of some of these Orders have been published in the Press before they

have been available to Members of this House; and if so, why?

Captain Crookshank: I have explained exactly what happened in the cases of the two Orders to which my hon. Friend referred, and from what I have said he will see that they were made available at once. If he has any other cases in mind, perhaps he will let me know of them. I am as anxious as he is that these Orders should be available as soon as possible.

Oral Answers to Questions — FOOD SUPPLIES.

FLOUR-MILLING INDUSTRY.

Mr. De la Bère: asked the Chancellor of the Duchy of Lancaster whether he will issue some statements to show to what extent the flour-milling industry is controlled by Order, both as regards the type of flour produced, and the price at which flour and feeding-stuffs made by the industry are to be sold?

The Parliamentary Secretary to the Ministry of Food (Mr. Lennox-Boyd): As the reply is necessarily rather long, I will, with my hon. Friend's permission, circulate it in the OFFICIAL REPORT.

Mr. De la Bère: May I ask my hon. Friend whether he would ask the Minister of Food, who is not present to-day, to be good enough to see me personally in this matter, which is very important indeed?

Mr. J. Morgan: Is the levy subsidy still charged on the flour and paid through the consumers' bread?

Following is the reply:

The Flour Milling Industry is controlled as regards the type of flour produced and the price at which flour and feeding-stuffs made by the industry may be sold, by the following three Orders issued in pursuance of powers conferred under the Defence (General) Regulations, 1939:

The Control of Mills (Flour and Provender) (No. 1) Order, 1939, made by the Board of Trade on 3rd September, 1939.

The Flour (Prices) (No. 1) Order, 1939, made by the Board of Trade on 3rd September, 1939.

The Feeding-Stuffs (Maximum Prices) Order, 1940, made by the Minister of Food on 6th January, 1940 {as amended by Order dated 18th January, 1940).

The Control of Mills (Flour and Provender) (No. 1) Order, 1939, prohibits millers from milling or delivering.any cereal or manufacturing any cereal product except under licence and provides that any specified conditions may be attached to such licence including conditions as to the quantity and type of product which may be manufactured. On 3rd September, 1939, the Board of Trade issued a General Licence (as amended by Order dated 9th December, 1939) authorising all flour millers to continue to manufacture, but prohibiting, except under special authority, the production of any flour other than straight-run flour as defined in the Flour (Prices) (No. 1) Order. The Board have in a few cases issued special licences to individual millers for the production of flour other than straight-run flour. No special licence is required to produce wholemeal flour which is covered by the definition of straight-run flour.

The Flour (Prices) (No. 1) Order, 1939, defines straight run flour and fixes a "basic price" for all sales of such flour and provides for certain additions to and deductions from the basic price and for carriage, and credit. The Order prohibits the sale of flour at prices other than those specified on the Order.

The Feeding-Stuffs (Maximum Prices) Order, 1940 (which revokes the Feeding-Stuffs (Maximum Prices) Order, 1939, dated 29th September, 1939, which itself revoked the Feeding-Stuffs (Provisional Prices) Order, 1939, dated 18th September, 1939) prescribes maximum prices which may be charged to the consumer for approximately 70 types of home-produced feeding-stuffs, and for a similar number of types of imported feeding-stuffs. The most important of these from the British flour millers' point of view are the wheat by-products (fine wheatfeed and straight-run bran) manufactured in the process of milling flour, although flour millers who are also provender millers produce other cereal products specified in the Order.

The effective result of these Orders is that the flour mills have since the outbreak of war, while remaining in the possession of their owners, been controlled at first by the Board of Trade and subsequently by the Ministry of Food.

Mr. De la Bère: asked the Chancellor of the Duchy of Lancaster whether he is

now able to give an assurance that it is not intended to continue for the duration of the war the operating system of the Millers' Mutual Association in connection with holding within certain limits the price of flour in view of the fact that under this system excess of output is penalised and non-attainment of output is subsidised?

Mr. Lennox-Boyd: I would remind my hon. Friend that the Millers' Mutual Association is not controlled by the Ministry of Food. My information is that the rules of the Association prohibit it from taking any action to fix or regulate the price of flour. The price of straight run flour in the United Kingdom was fixed at 22s. per sack of 280lb. by the Flour (Prices) (No. 1) Order, 1939, made by the Board of Trade at the outbreak of war. I am assured that immediately after the outbreak of war the Association in question suspended the operation of any rules regulating the output of flour by its members.

SALE OF PIGS (CONTROL).

Mr. Mander: asked the Chancellor of the Duchy of Lancaster whether he is aware of the difficult position created for established pig salesmen who, by reason of the Government's control of the sale of pigs, will be put out of business entirely; and whether he will consider the advisability of employing such firms as the agents of the Government for this work, as is being done in the case of cattle and sheep, or of suitably compensating them?

Mr. Lennox-Boyd: The scheme for the control of the sale and slaughter of pigs does not necessarily put pig salesmen out of business. They are at liberty to deal in store pigs. The question of employing these firms as agents of the Government in connection with the purchase of fat pigs has been carefully considered and I am satisfied that it is not practicable under existing circumstances. The question of compensation does not arise. The position is not the same as in the case of cattle and sheep because pigs are being bought on the basis of dead weight ascertained at the point of slaughter whereas in the case of cattle and sheep the purchase price is determined by a certifying authority composed of three persons while the live animal is at the collecting centre.


There is therefore no opportunity for the employment of these dealers as graders of pigs.

Mr. Mander: Is the Minister aware that in Wolverhampton alone there are two firms with an annual turnover of £250,000 who have been put out of business as a result of this, and what action does he propose to take to meet such cases?

Mr. Lennox-Boyd: I am sorry for individuals who are displaced through the inevitable operation of war-time schemes, but we are satisfied that it would be impossible to employ those firms as agents of the Government.

Mr. Mander: Is the Minister prepared to receive a deputation from the Midlands Pigs Salesmen's Association of persons representing these people?

Mr. Lennox-Boyd: I am always accessible, but I can hold out no assurance of any alteration in this arrangement.

Lieut.-Colonel Acland-Troyte: Is it not the case that this work would be much better done by those who have experience?

SACCHARINE (DUTY).

Mr. Graham White: asked the Chancellor of the Duchy of Lancaster whether consideration has been given to the advisability of reducing the import duty on saccharine in order to encourage the use of this product as a substitute for sugar?

Mr. Lennox-Boyd: The duty on saccharine is directly related to the duty on sugar by reference to sweetening power. In view of the revenue considerations involved the suggestion of the hon. Member cannot be adopted.

REGISTERED RETAILERS.

Sir Herbert Williams: asked the Chancellor of the Duchy of Lancaster, what right of appeal is granted to a retailer in the event of his licence to trade being withdrawn by a local food committee?

Mr. Lennox-Boyd: No right of appeal by a retailer against a decision by a food control committee to withdraw his licence is conferred by the Food Control Committees (Local Distribution) Order but every food control committee is required to comply with my right hon. Friend's directions. Where, therefore, a retailer is dissatisfied with the decision of a food

control committee, he is entitled to state his case to the divisional food officer. After such local investigation as may be necessary, the matter may be submitted to my right hon. Friend for consideration and decision.

Sir H. Williams: Why is it necessary to have a retail trader's licence at all? What is the purpose of the Order?

Mr. Lennox-Boyd: In order that, in time of war, foodstuffs should be delivered with the greatest expedition and economy.

Sir H. Williams: Can my hon. Friend explain in what way expedition and economy are effected by giving people a totally unnecessary licence to exist?

Sir H. Williams: asked the Chancellor of the Duchy of Lancaster whether he will issue instructions that consumers are free to change their registered retailers of rationed foodstuffs, subject to a reasonable but short period of notice?

Mr. Lennox-Boyd: No, Sir, the distribution of rationed foodstuffs is based upon the allocation of a definite amount of the rationed food proportioned to the number of customers which the retailer has to serve. It is essential to the success of this plan that the number of customers registered with the retailer should not be subject to frequent or material fluctuation.

Sir H. Williams: In practice, why should the individual simply become the slave of the retailer; and having regard to the fact that the allocation is ineffective in any case, since it has been found necessary to double the bacon ration in order to sell the bacon, what is the purpose of the scheme?

Mr. Lennox-Boyd: The last part of the question raises another matter which will be dealt with later. As regards the first part, it is obvious that if each customer were allowed to change, and if they changed very frequently, then the whole basis of the allocation would be destroyed.

Mr. Holdsworth: Supposing the consumer has a genuine grievance, what is the remedy?

Mr. Lennox-Boyd: His remedy is to appeal to the local food committee who, in cases where there is a serious grievance, can grant immediate relief.

Sir Archibald Sinclair: What evidence has the hon. Gentleman to show that such a very large number of people would want to change their retailers, that it would destroy the basis of the Government's scheme? It sounds a fantastic assumption.

MARGARINE (MARKING).

Mr. Glenvil Hall: asked the Chancellor of the Duchy of Lancaster whether he will issue regulations to require producers of margarine for domestic consumption to indicate its vitamin content in order that diabetic and other invalids forced to purchase margarine as a substitute for butter may know which brands to buy?

Mr. White: asked the Chancellor of the Duchy of Lancaster whether, in view of the decision that no supplementary allowance of butter is needed for invalids, he will issue instructions that vitaminised margarine should be clearly marked?

Mr. Lennox-Boyd: I would refer the hon. Members to my reply to the hon. Member for Consett (Mr. David Adams) on 25th January. All margarine sold for domestic consumption after 5th February will be vitaminised to the same extent as btter.

Mr. Glenvil Hall: May I ask whether the hon. Gentleman will undertake that the packet will be marked with the percentage of vitamins in the margarine?

Mr. Lennox-Boyd: I could give no such undertaking, but all margarine will be vitaminised and it will contain Vitamins A and D to the same extent as butter.

Mr. Leach: May I ask the Minister whether he believes in this process?

ANIMAL FEEDING-STUFFS AND MEAT SHORTAGE (GLOUCESTERSHIRE).

Lord Apsley: asked the Chancellor of the Duchy of Lancaster whether he is aware that the farmers in the Sodbury Vale, Gloucestershire, are killing off their stocks, including breeding stock, for lack of feeding-stuffs, while 80 tons of feeding-stuffs are stored at the Cow Mills, Chipping Sodbury, which the Government will ant allow to be released; and will he take prompt action?

Mr. Lennox-Boyd: From inquiries that have been made I understand that the sock of feeding-stuffs referred to consists

of home-grown wheat quantity is 80 sacks 9 tons) and not 80 tons represents two-thirds of 120 sacks, one-third of sold for feeding livestock. The remaining two-thirds is precluded by the home Grown Wheat (Control) Order, 1939, from being sold for that purpose if the wheat is of millable quality. The holder of the wheat has submitted a sample to the local wheat committee for a ruling as to whether it is millable wheat within the meaning of the Wheat Acts; if it is decided that a wheat certificate cannot be issued for the wheat, the miller will be able to sell the wheat for feeding livestock.

Lord Apsley: Can he say whether it is in good order and how long it has been in store?

Mr. Lennox-Boyd: I have no information to the effect that it is deteriorating.

Mr. Stephen: Can the Minister give an assurance that a decision will be taken before the end of the war?

Lord Apsley: asked the Chancellor of the Duchy of Lancaster whether he is aware that farmers in the Sodbury Vale, Gloucestershire, who are killing off stock, have to send them to Bristol to he slaughtered, whence the meat is sent on to London, and that the people of Chipping Sodbury, Old Sodbury, Yate, Little Sodbury and Wickwar are unable to obtain meat as there is no local source of supply; and what steps he is taking to remedy this?

Mr. Lennox-Boyd: Under the Meat and Livestock control scheme farmers in the Sodbury Vale do not have to send their stock to Bristol for slaughter. These farmers may sell their fatstock at the nearest fatstock market which has been approved as a collecting centre, for instance, at Chipping Sodbury and Yate, unless they have individually elected to use another centre. The fatstock is purchased by the Ministry of Food and transported in bulk from the collecting centre to a selected slaughterhouse. The slaughterhouse or slaughterhouses to which particular stock is consigned is decided in the light of the requirements of the country as a whole for the different classes and qualities of meat.
As regards the allegation of a shortage of meat in the districts enumerated in the


Question, on account of the absence of the local source of supply, I wish to assure my hon. Friend that any temporary shortage in home-killed meat that has developed has been fully made good by supplies of imported meat.

Lord Apsley: Is he aware that the supplies they have had are imported meat, and only at the rate of three-quarters of a pound per person including bone?

Mr. Lennox-Boyd: I cannot accept that figure. My information is that full supplies of meat have been issued in the present week to the places mentioned.

Lord Apsley: Perhaps I may send my hon. Friend some particulars.

Mr. Lennox-Boyd: Yes, Sir.

CEREAL CONTROL.

Mr. White: asked the Chancellor of the Duchy of Lancaster why the office of the Cereal Control Board is at Godstone?

Mr. Lennox-Boyd: The central office of the Cereals Control Board is in London, but the Cereals Import Committee of the board, which is concerned with the technical aspects of buying imported supplies of cereals and their distribution in the United Kingdom, is housed at Godstone. This is a measure of dispersal adopted as an insurance against the possibility of dislocation of an essential service. The accommodation has been placed at the disposal of the board by Mr. James V. Rank who is chairman of the committee.

Mr. T. Williams: May I ask whether the home of the chief of the milling combine is the likeliest possible place for the Area Import Board; and will he tell us exactly who constitutes the buying executive, with their names and, exactly in what trades they are involved?

Mr. Lennox-Boyd: I cannot give all the names in answer to a Supplementary Question, but we are much indebted to the far-sighted work clone by the committee under Mr. Rank's chairmanship. When the history of these transactions becomes known it will be realised what good work this committee has done in the national interest.

Mr. De la Bère: Is my hon. Friend aware of the misstatement made by the Minister of Food on the 25th January when he stated that Godstone was a small auxiliary control board? Is it not a fact that it is the hub of the rascally milling combines?

MOLASSES.

Mr. R. Gibson: asked the Chancellor of the Duchy of Lancaster whether he is aware of the dissatisfaction owing to the fact that sugar refineries at Greenock are allowed to work short-time, while molasses, available for use as raw material in these refineries is diverted for manufacture into non-food producing products; and what steps he intends to take to prevent such diversion, and thus increase both the work available at Greenock, and the sugar available for rationing?

Mr. Lennox-Boyd: I am aware that there is a possibility that the sugar refineries at Greenock may have to work short time owing to the necessity for rationing sugar. Imported molasses are mostly unsuitable for refining into sugar and are as a general rule required for industrial purposes. I fear that it is impracticable to increase the supply of sugar at the present time.

Mr. Gibson: Will the Minister answer that part of the Question which deals with the diverting of molasses to the manufacture of non-food-producing products.

Mr. Lennox-Boyd: As I have said, they are being used for industrial purposes. The molasses contain such a low sugar content that they would be of very little use in meeting the hon. Member's need.

Mr. Gibson: What are the industrial processes referred to in the answer?

Mr. Lennox-Boyd: That is a question for the Minister of Supply.

BUTTER.

Mr. J. Morgan: asked the Chancellor of the Duchy of Lancaster whether he is aware that a substantial number of persons are known not to be buying their rations of butter, thus leaving substantial quantities in the hands of shopkeepers and wholesalers, and as this is due to the increased price of this food fixed by his Department, what steps he is taking to revise the price?

Mr. Lennox-Boyd: I am aware that a moderate percentage of the 4 ounces butter ration is not at present being taken up, but there is no evidence to indicate that substantial quantities of butter are left in the hands of shopkeepers and wholesalers. It is not practicable to reduce the present maximum price of butter without incurring a considerable loss. The present retail price has been in operation since September and has not been introduced as a result of rationing.

Mr. Morgan: Is the hon. Gentleman aware that there were good qualities of butters available a short time ago, in September, at about 1s. and 1s. 2d. per pound? Where have these butters gone? 1s the announcement to vitaminise margarine a preparatory step towards getting certain classes on to margarine, and other classes on to a higher butter ration?

Mr. Lennox-Boyd: Most certainly not. One hopes that people not hitherto able to buy butter may, for instance, through the improvement of individual wages and other factors, be able to buy butter, but there is no intention on the part of the Ministry of Food to grade margarine and butter according to classes.

BACON.

Mr. J. Morgan: asked the Chancellor of the Duchy of Lancaster to what extent the doubling of the bacon ration, recently announced, is an attempt to dispose of the substantial quantities of bacon left in business hands to those customers who can afford to buy bacon at the prices charged; what was the reason for such supplies being accumulated; and what steps is he taking to reduce the price?

Mr. Lennox-Boyd: The Ministry has for some time past been building up a reserve of bacon to meet possible contingencies. This reserve has now been completed, and in view of current satisfactory arrivals it has been possible to increase the amount of bacon available for general consumption. As regards the last part of the Question, this matter is under constant review in the light of all relevant circumstances.

Mr. Morgan: Is it not a fact that the same thing applies to bacon as to butter, and that certain classes of people have been unable to afford their allotted ration and have had to forego it, while other people who can afford it, are going to get their ration as well?

Mr. Lennox-Boyd: I would not deny that the price factor enters into its consumption. It is quite clear, however, that in many districts, indeed in most districts, cheaper cuts of bacon are being sold to-day, and that those cuts left on the grocers' hands are very often the more expensive.

Sir R. Acland: Why is the ration being increased when there may be a war starting in a few months time?

Sir H. Williams: What happens to the allocated supplies of bacon and butter which remain unsold?

Mr. Lennox-Boyd: If there is a danger of the stock going bad he may sell it, if he obtains the leave of the local food control committee.

Mr. Morgan: What has happened to the shilling butters I have asked about?

MINISTRY OF FOOD (STAFF).

Mr. De la Bère: asked the Chancellor of the Duchy of Lancaster whether he can now give particulars of the salaries to be paid by the Ministry to officials on the Pigs and Bacon Marketing Boards who are being transferred from those boards to positions in the bacon and ham branch in the Ministry of Food?

Mr. Lennox-Boyd: I regret that I am not yet in a position to give my right hon. Friend the information he desires but I will circulate a statement in the OFFICIAL REPORT, in the course of the next few days.

Mr. De la Bère: In view of the fact that the Minister was good enough to send me an explanatory letter, I will not press this matter.

Oral Answers to Questions — MINISTRY OF SUPPLY.

SCRAP-IRON.

Mr. Hannah: asked the Minister of Supply whether, before buying scrap-iron at high prices in New York, he is satisfied that it is impossible to find further supplies in this country?

The Parliamentary Secretary to the Ministry of Supply (Colonel Llewellin): The efforts to increase the home supplies of iron and steel scrap are yielding satisfactory results, but in view of our high rate of steel production it is still necessary


to supplement these supplies by importations from abroad.

WOLVERHAMPTON INDUSTRIES (BUILDING STOPPAGE).

Mr. Hannah: asked the Minister of Supply whether his attention has been called to the fact that many industries in the Wolverhampton area are in serious difficulties from the almost complete stoppage of building; and what action does he propose to take?

Colonel Llewellin: My right hon. Friend has no direct responsibility for the building industry and he is not aware of the position referred to. If however there has been curtailment of building operations in Wolverhampton, and it has been caused by shortage of building material, and the buildings are needed for work essential to the needs of the nation in war, my right hon. Friend would be glad to be informed of the details in order that they may be placed before the Works and Buildings Sub-Committee of the Ministerial Priority Committee of the Cabinet.

NEWSPAPERS (RESTRICTED SALE).

Mr. Leach: asked the Minister of Supply whether he has observed that newspaper proprietors, having reduced the size of their journals to meet the paper shortage, are still using this shortage as a reason for imposing restrictions on newsagents, to the inconvenience of the public; and will he consider issuing a regulation that the usual practice governing sale or return shall operate, failing agreement between newspaper owners and retailers or take other steps to mitigate the inconvenience caused to the travelling public by the present arrangements?

Colonel Llewellin: As was stated in the reply to the hon. Member for Clay Cross (Mr. Ridley) on 7th November, the detailed arrangements in the trade regarding the return of unsold newspapers are not matters in which my right hon. Friend can intervene.

Mr. Leach: Is there no prospect that the Minister will see there is a public grievance here, and take powers to deal with it?

Colonel Llewellin: The difficulty of the situation is that we asked the newspaper proprietors to economise in the use of paper, and it is rather difficult, on the

other hand, if we ask them to give more spare copies to the wholesalers and retailers throughout the country, because the two requests would be completely inconsistent.

Mr. Leach: Do you not know about this grievance being an actual fact?

Colonel Llewellin: I know about the grievance, but I am afraid it is one of those things which result from the difficulty of getting enough wood pulp in time of war.

ROYAL ORDNANCE FACTORY (DISCHARGES).

Mr. Oliver: asked the Minister of Supply whether he is aware that at a royal ordnance factory a number of highly-skilled men have received notice terminating their employment owing to shortage of work; whether this is due to excessive contracts being placed with private firms; and whether steps are being taken to retain the services of these men in Government employment?

Colonel Lewellin: No, Sir. No skilled men have recently been discharged by the royal ordnance factory in question on account of shortage of work.

Mr. Oliver: Do I understand from the reply that skilled craftsmen are not being discharged, and has the hon. and gallant Member taken the trouble to inquire at the ordnance factory?

Colonel Llewellin: Naturally inquiries are always made from the factory concerned before a reply of this sort is given. No men have been discharged owing to lack of work. It is true that there have been a few discharges of people for being bad time-keepers and reasons of that sort, but none through shortage of work.

TIMBER CONTROL.

Sir R. Clarry: asked the Minister of Supply whether he is aware that Government contractors often find difficulties under the existing timber control arrangements in obtaining requisite supplies of timber to carry out their contracts owing to the contractor, although holding a permit, being unable to obtain either a quotation or supply from timber merchants which would necessitate reducing their stocks; and whether he will consider giving the timber control department the necessary power to requisition stocks held by merchants whenever necessary?

Colonel Llewellin: I am aware that such difficulties have occurred in certain cases. A suitable remedy is under consideration.

Rear-Admiral Beamish: asked the Minister of Supply what are the steps, and the results of them, that he is taking to discover alternatives to timber for use as parts of military hutments and for similar armament purposes; and whether the timber now used for hutments is so cut and fitted as to render it afterwards adaptable for purposes other than Army requirements?

Colonel Llewellin: I can assure my hon. and gallant Friend that very thorough investigation is in progress with a view to securing every possible economy of timber wherever it is used. In hutments that are now being built and for future hutment contracts the use of timber has been practically eliminated, being confined to doors and windows, except in the case of some Nissen huts. Full use is being made of such substitute materials as brick, coke breeze and concrete slabbing. Such timber as is used will, however, be of little subsequent use for other purposes.

Mr. R. Gibson: Are these alternatives for timber being brought to the notice of persons charged with the completion of housing schemes?

Colonel Llewellin: I believe that is so. There are representatives of all Department s on the sub-committee which deals with these matters, and they are aware of it. For detailed information on that point the hon. Member ought to put a Question down to the Minister of Health or the Secretary of State for Scotland.

BUILDING CONTRACTS (SCOTLAND).

Mr. R. Gibson: asked the Minister of Supply how many large firms hold building contracts from the Government; how many of those firms have such contracts in Scotland and, of these firms, how many have their headquarters in Scotland; and whether he will consider, with regard to such building operations in Scotland, the adoption of normal Scottish procedure whereby a Scottish architect is put in charge of the whole job and contracts are placed with individual firms for the various types of work included in the job?

Colonel Llewellin: My right hon. Friend is not responsible for Government building contracts generally. The Ministry of

Supply has however substantial needs for new factories and 37 large firms at present hold building contracts placed by or on behalf of the Ministry. Twelve of these contracts are for work in Scotland and 10 of this number are held by Scottish firms. With regard to the last part of the Question, tenders for these contracts were called for from firms in Great Britain as a whole, and the procedure adopted had therefore to be that which obtains generally throughout the country.

Mr. Gibson: Will the Minister bring to his right hon. Friend's notice the desirability of making use of the procedure in Scotland which is indicated in the Question, and which works in Scotland advantageously and economically from the point of view of getting the work done?

Colonel Llewellin: As I understand the suggestion, it is that a Scottish architect should have power to supervise the work. A large part of our factory building programme is done for us by the Office of Works, who have a very efficient staff. In regard to other cases the designs are done in our own building department. I am afraid that there is no place in that scheme of things where an outside architect can be fitted in.

ESSENTIAL LABOUR (CALLING-UP).

Mr. Higgs: asked the Minister of Supply whether he is aware that his letters, dated 27th November and 9th December, 1939, Reference 279 (Gen.) 40 (SS 1B), were issued in order to secure men, who are below the respective ages of reservation, in occupations essential for the completion of Government contracts as long as possible; is he aware that these men are being called up in spite of the fact that their employers have filled in Form NS 88 as instructed; and what further action does he propose to take?

Colonel Llewellin: My right hon. Friend is not aware of any cases in which men have been called up in spite of the fact that their employers had filled in Form NS 88 in accordance with the arrangements. If the hon. Member has any specific cases in mind, I shall be glad to be informed of them.

GOVERNMENT CONTRACTS (FINANCING).

Mr. Thurtle: asked the Minister of Supply whether he is aware that an officer


of his Department introduced, as a reliable financial agent, to the head of a firm requiring finance to carry out urgently needed Government contracts, a man who had been convicted of fraudulent conversion and who had been declared bankrupt on a number of occasions; who recommended the man in question to his Department as a suitable person to obtain the required finance; what inquiries the officers of his Department made regarding the antecedents of this man before undertaking the responsibility of recommending him to the firm in question; and whether he is prepared to have a full inquiry made into all the circumstances of this case?

The Minister of Supply (Mr. Burgin): I am aware of the case to which the hon. Member refers though. I must not be understood as accepting all the implications involved in his Question. Inquiry has already been made into the case and the papers have been submitted to the Director of Public Prosecutions, who has recently advised that he is not satisfied that there is evidence on which to support criminal proceedings against any of the persons involved. In the circumstances I do not consider any useful purpose would be served by a further inquiry.

Mr. Thurtle: Is the right hon. Gentleman aware that he has not answered my Question as to who recommended this man to his Ministry as a reliable person, although he was a man with a criminal record? Is he aware also that he has not answered my Question as to what inquiries officials of his Department made as to the antecedents of this man before sending him to the firm in question?

Mr. Burgin: I have endeavoured to tell the hon. Member that full inquiry has been made in the Department as to all the matters brought to our notice by the papers on which the Question is founded. I took a serious view of this matter, and my hon. and gallant Friend the Parliamentary Secretary and I have given a great deal of time and thought to it and have discussed the matter with several Members of the House. The antecedents of the man in question were not known to the man making the introduction referred to in the Question. Inquiry has been made in the Department as to whether blame of a criminal character can be attached in the circumstances of the

case, and the matter was submitted through the Treasury Solicitor to the Director of Public Prosecutions. The answer is that there is not ground on which, in the opinion of the Director, criminal proceedings would lie. What action, if any, of a disciplinary character has to be taken is a matter for which I, as head of the Department, in so far as the gentleman is a member of my Department, must take the responsibility.

Mr. Thurtle: In view of the public interest involved in the facts of this Question, I beg to give notice that I will raise the matter on the Adjournment to-day?

CHINA AND JAPAN.

Mr. R. Morgan: asked the Prime Minister whether his attention has been called to the peace terms offered by Japan to the Chinese puppet government; and whether the Foreign Office has received any information on the subject from either of the British ambassadors in the Far East?

Mr. Butler: Yes, Sir. His Majesty's Ambassador in China has called my Noble Friend's attention to an agreement purporting to have been signed by Mr. Wang Ching-wei and the Japanese authorities on 30th December last. The full text is being forwarded by air mail. As published in the Shanghai Chinese Press the documents bear neither signature nor date, and may therefore be merely preliminary exchanges of views. A spokesman of Mr. Wang has described them as "demands submitted by the Japanese," and has denied that any agreement has been signed with the Japanese.

Mr. Morgan: asked the Prime Minister whether the British Government, in view of the treaty negotiations between Japan and the Chinese puppet government, still adhere to the terms of the Washington Treaty?

Mr. Butler: In their Note of 14th January, 1939, to the Japanese Government, His Majesty's Government made it clear that they intended to adhere to the principles of the Nine Power Treaty, and this remains their attitude.

COAL SUPPLIES, GLASGOW.

Mr. Leonard: (by Private Notice) asked the Secretary for Mines what action he


proposes to take to meet the representations he has received from the Lord Provost of Glasgow asking for immediate supplies of coal to avert severe hardship to families in tenement property and stating that 5,000 tons daily are required?

The Secretary for Mines (Mr. Geoffrey Lloyd): I received last night a telegram from the Lord Provost of Glasgow asking for immediate supplies to avert hardship to families in tenements. The hon. Member and the House, remembering that Glasgow is surrounded by coal mines, will appreciate how acute the transport difficulty has been in that area. In order to meet anticipated difficulty it was arranged on Saturday and Monday last to bring coal specially from the Fife and Lothian coalfields to Glasgow. Those trains also were delayed, but I am glad to say that some have arrived to-day, and that coal is now reaching Glasgow from neighbouring mines. I attach the highest importance to preventing hardship among smaller consumers and the local officers of my Department have instructions and full powers to take all possible action locally that may be necessary.

Mr. Leonard: Does the Minister appreciate that a telegram received by several hon. Members of this House from the Lord Provost asserts that Glasgow is suffering from a coal famine and that it is within the knowledge of Members representing Glasgow that that shortage began to display itself prior to the weather to which reference has been made?

Mr. Lloyd: No, Sir, I do not think it would be accurate to say that these difficulties began to show themselves prior to the weather difficulties, because the weather difficulties with which the railways have been contending have extended over a considerable time, but I should Eke to point out that the telegram from the Lord Provost was received yesterday, and that since that time the situation has improved, because the coal I have mentioned has arrived—I have just got the information.

Mr. Buchanan: Is the Minister aware that attention was called to this matter much earlier than yesterday, that cooperative societies have been refusing orders for coal from their customers and that people cannot get coal? Why has it taken all this time to take the action

which he says has resulted? Is it not a fact that his attention was called almost to days ago to this grave position in Glasgow?

Mr. Lloyd: I am not aware of the information which the hon. Member has just suggested was conveyed to me earlier but I would point out that the action which I have mentioned was taken as early as Saturday last and before the telegram was received from the Lord Provost.

Mr. A. V. Alexander: Is the Minister not aware that representations were made to his Department some time ago about the immediate shortage owing to the action of Government Departments other than his requisitioning all coal of under 26s. a ton from pits in the area, and that in consequence there was an immediate shortage of the coal that the poorest class of consumers can afford to buy?

Mr. Lloyd: Yes, Sir, I understand there have been representations, and, indeed, steps were taken earlier to deal with the situation, but the House will appreciate that even though those steps were taken the weather situation deterioriated again, thus making the position more difficult.

Mr. Neil Maclean: Is the Minister not aware that these conditions have been prevailing in Glasgow for the last four or five weeks, that rationing has not been going on as it ought to have gone on, and that complaints have been made; also, that on the south side of Glasgow particularly, people have been out on the streets surrounding coal carts trying to get supplies of coal even late at night? What is he going to do to get something done in the matter at once, namely, to see that the 5,000 tons of coal required in Glasgow get there?

Mr. Lloyd: I think it will be found that the difficulties have been coincident with the severe weather affecting transport.

Mr. Maclean: That is not so.

Mr. Lloyd: That is my information.

Mr. Maclean: It is not true.

Mr. Lloyd: Very prompt steps have in fact been taken and I do intend to keep in the closest possible touch with the situation and to do everything that is possible.

Mr. Holdsworth: Is the Minister not aware that there is a shortage all round the country and not alone in Glasgow and is it not due, not to the inclement weather but to the policy of restriction of road transport which has prevented stocks being obtained?

Oral Answers to Questions — MERCHANT SHIPBUILDING AND REPAIRS.

GOVERNMENT PROPOSALS.

Mr. Attlee: (by Private Notice) asked the Prime Minister whether he has any statement to make as to the future responsibility for merchant shipbuilding?

The Prime Minister (Mr. Chamberlain): His Majesty's Government have decided that the Admiralty shall become responsible for merchant shipbuilding and repairs as from 1st February, 1040. The arrangement is similar to that adopted in the latter part of the war of 1914–18.
It is sought to secure from this change in organisation the advantages of centralising the use of all resources available for shipbuilding, both in materials and in labour, and of introducing greater elasticity into the allotments of capacity to naval and mercantile requirements.
The Admiralty will assume the responsibility for ensuring the necessary production of mercantile shipping, as well as that of meeting the requirements of the Navy, it being understood that, as regards the types of merchant ship to be built, the Admiralty will meet the requirements of the Ministry of Shipping, after consultation with representatives of shipowners.
Sir James Lithgow will be appointed to the Board of Admiralty as Controller of Merchant Shipbuilding and Repairs, and Sir Amos Ayre, who is at present Director of the Merchant Shipbuilding and Repairs Division of the Ministry of Shipping, will become Director of Merchant Shipbuilding and Repairs at the Admiralty.

Mr. Shinwell: Is the Prime Minister aware that Sir James Lithgow, who has been appointed to this important post, was the person primarily responsible for the closing down of shipyards in this country and is he the most suitable person to appoint to a post of this kind? What is the primary reason for his transfer from the Ministry

of Shipping to the Admiralty? Is it because the organisation for the replacement of shipping tonnage has broken down? Furthermore, are we to understand that the Admiralty have now assumed complete control of mercantile shipbuilding operations and what about the financial arrangements? Will they fall on the Navy Vote?

The Prime Minister: The hon. Member has asked me too many questions for me to be able to remember them.

Mr. Shinwell: This is a very important matter. The first question was whether the Prime Minister can explain the reason why Sir James Lithgow has been appointed to this position in view of the fact that Sir Amos Ayre was appointed to the Ministry of Shipping for this purpose? Has he been deposed?

The Prime Minister: He has not been deposed and Sir James Lithgow was considered to be the most fitting person and the best qualified person for the position to which he has been appointed.

Mr. Shinwell: As regards control, does this mean that the Ministry of Shipping has no longer any say as regards the building of merchant shipping, that it is entirely a matter for the Admiralty and what about the question of finance and does it fall on the Navy Vote?

The Prime Minister: There are two questions. Perhaps the hon. Member will allow me to answer the latter Question first. The question of finance, of course, will be the responsibility of the Admiralty. With regard to the first Question, the hon. Member has already forgotten what I said in my answer. If he will read it he will see that his inference is quite incorrect.

Mr. Shinwell: May I—

Mr. Speaker: rose—

Mr. Shinwell: On a point of Order. When a Question is put by Private Notice and obviously by arrangement between the Government and the Leader of the Opposition, surely it implies that it is a Question of primary importance, and in view of that I would ask with the greatest respect whether it is desirable that Supplementary Questions, which even the Prime Minister admits are of importance, should be suppressed? Otherwise how are we to get the information we desire?

Mr. Speaker: The fact that the matter was important was why I allowed the right hon. Gentleman to put this Question as a Private Notice Question. In regard to Supplementary Questions I always allow one or two, but that cannot be taken as a justification for subjecting Ministers to a sort of viva voce examination.

Mr. Attlee: I had one or two Supplementaries to put after my hon. Friend had put his, in order to elucidate the exact nature of the Prime Minister's very important statement. May I be allowed to put a Supplementary Question?

Mr. Speaker: Had the right hon. Gentleman risen first I would have called upon him first. He can certainly put his Supplementary Questions now.

Mr. Attlee: Can the Prime Minister give us any further details in regard to this arrangement? Do I understand that the Board of Admiralty will be responsible for the actual building of the ships? To whom will the ships belong when they are built, and what will be the nature of the finance in this matter?

The Prime Minister: Yes, Sir; the Admiralty will be responsible for the building of these ships. When built the ships will be the property of the Government. As to the finance, perhaps the right hon. Gentleman will be good enough to put a Question down.

Mr. Buchanan: Is it not the case that Sir James Lithgow is connected with a large number of companies of one kind or another which all require a certain amount of service? Will he, in all cases, give up his connection with those companies and devote his full time to the task to which the Prime Minister has appointed him?

The Prime Minister: I think I must ask the hon Member to put that Question down, because I am not quite in a position to answer it.

Mr. Buchanan: Surely, in making the appointment of a well-known figure like Sir James Lithgow, who is the governing director of banks, of Beardmore's, Colville's, and his own firm, it would be an ordinary precaution to find out whether he would devote his time to the appointment free from those companies?

The Prime Minister: I do not think that the hon. Member need be under any misapprehension or apprehension in the matter; but I did not want to give an answer when I was not fully equipped to do so.

Sir A. Sinclair: Is Sir James Lithgow to be a salaried member of the Board of Admiralty?

The Prime Minister: I understand that he is not to get any salary.

Mr. Attlee: Does the Prime Minister understand that there is a feeling of disturbance in the mind of the public at the appointment of all kinds of persons who have special private interests, when it is not clear whether those gentlemen have abandoned their private interests in acting as servants of the Government or whether they are continuing to be representative both of their private interests and of the Government service?

The Prime Minister: I recognise that it is very important that there should be no suspicion that a man who is appointed to an important post under the Government should have other interests which might conflict with his duty as a servant of the Government, but I feel sure that that has been fully provided for in the present case; but, as I say, I am not fully informed of all the circumstances, and I think that the best plan would be to have a Question put down.

Mr. Buchanan: Are there any more Scotch employers that the Prime Minister needs? It is a hard-hearted crowd you are getting.

Oral Answers to Questions — COST OF LIVING.

FOOD PRICES (GOVERNMENT CONTROL).

Mr. Attlee: (by Private Notice) asked the Chancellor of the Exchequer whether he can make any statement regarding the cost of living?

The Chancellor of the Exchequer (Sir John Simon): The announcement I have to make to the House refers to decisions which the Government have taken with a view to controlling as far as possible the retail prices of the principal essential foodstuffs.
At the outbreak of war there was an immediate and inevitable rise in the cost of buying food abroad and of bringing


it to this country. This increase in wholesale prices resulted from a number of causes, for instance, the devaluation of the pound, higher freights, and war risks insurance. It was in a sense the natural result of transition from peacetime to war-time conditions, and it would be a mistake to imagine that it necessarily foreshadowed a series of similar or even more marked increases in prices. This initial rise was gradually reflected in an increase in retail prices in this country, and the cost-of-living index (in which food prices are the predominant factor), after standing at 155 at the beginning of September, rose by 18 points, or more than 10 per cent., to 173 at the end of November.
Hon. Members who have followed the monthly figures will be aware that the cost-of-food index remained quite steady between 1st December and 1st January. I will explain the reason. The position at the beginning of December was that further increases in food prices would have been found to be necessary if the working of the Food Control were not to involve a loss to the Exchequer. The Government then decided, after a careful examination of the economic situation and of the principles which ought to guide their policy in that sphere, that the Exchequer should bear, for the time being, the loss involved in an endeavour to avoid these further increases. It was due to this action that the cost-of-food index was unchanged between December and January. This policy of controlling retail food prices by the use of public funds is being continued, and I anticipate that as a consequence any increase there may be during the present month in the cost of food controlled by the Government will be of quite small dimensions.
The cost to the Exchequer of following this policy is, however, very substantial. It is at present running at the rate of £1,000,000 a week or, say, £50,000,000 a year, the cost arising principally from the holding of the prices of such articles as bread, flour, meat, and milk. In existing circumstances, when every demand upon the Exchequer must be subjected to the closest scrutiny, it would be unwise to assume that in all conditions we could continue to shoulder an increasing burden as the result of a policy of avoiding increases in the cost of living. On the other hand, we are very conscious of

the grave disadvantages which would be entailed in any excessively marked or swift advances in prices of primary necessities, and we are anxious to do all that is practicable to avoid this in the light of the economic position as it develops.
Our policy, therefore, is to continue, for a time at least, to make public money available, within such limits as prove possible, to hold retail prices of staple foods, or, at any rate, to impose delay and check the abruptness of any rise. The House will observe that this policy benefits not merely wage-earners but also all those with small fixed incomes and allowances.
Hon. Members will, I am sure, recognise the complexity as well as the significance of the problem with which the Government are endeavouring in this way to deal. It would not be right for the Exchequer, amidst its unprecedented burdens in the prosecution of the war, to undertake an unlimited commitment the end of which cannot be foreseen; still less would it be right for us to promise things which in the end we might find ourselves unable to fulfil. Upon other occasions both my right hon. Friend the Prime Minister and I have referred to the very serious economic dangers which would result in the event of rises in wages and salaries becoming tied automatically and mathematically to rises in the cost of living. This, of course, does not mean that the cost of living can be excluded from the various factors which have to be considered in determining rates of wages. But we all desire to avoid inflation, which brings satisfaction to no one, and the decision I have announced is the contribution which the Government propose to make, at the cost of additional burdens on the Exchequer, towards the attainment of our purpose. I have no doubt that all sections of the community will do their best, by the exercise of the appropriate restraints, to assist in furthering this common interest.

Mr. Attlee: The Chancellor of the Exchequer has made a very important statement, the subject matter of which will have to be debated in this House later, but I would like to ask him two questions, and in putting them I would like to say that we are all aware of the need for avoiding inflation and that we have from these benches urged that prices should be kept as far as possible stable. As to the


two questions, first of all, does the £5o,000,000 which he gives as the annual cost include the subsidies on milk, meat, flour and wheat; and, secondly, is it proposed to extend this policy to the other staple commodities outside the range of foodstuffs?

Sir J. Simon: No, Sir. The figure of £1,000,000 a week, which should be understood as a round figure, is a figure which represents the application of this definite policy, and it is not designed to include things already decided upon or voted by the House. As regards the second question of the Leader of the Opposition, it is certainly the case that there are other matters to be considered besides the important foodstuffs. As, of course, hon. Members know, the present cost-of-living index is made up of a great number of things. About 6o per cent. of it is food, and there is another important part of it which is rent, though rent is already controlled. Then there are also some others items, of which the most important, and the most difficult to deal with perhaps, is the price of clothing, because clothing is so very variable. As regards that, I can inform the House that we have been for some time very carefully examining, through a special committee, the problem of how clothing might perhaps be dealt with. I am not in a position to make an announcement, but I agree that it is very important. It has not been overlooked, but is being very closely examined by the Government and on behalf of the Government by those best qualified to do it.

Mr. T. Williams: The right hon. Gentleman mentioned that one of the commodities the price of which has increased is milk, and later he said that what the House had already done would not affect the present policy. Might I ask him, therefore, whether the £3,000,000 subsidy for milk recently granted and the £5,000,000 previously passed by this House are included; and, secondly, can he state which commodities where long-dated contracts have been entered into show any material increase in price?

Sir J. Simon: I should be very sorry, in answering these important questions, to convey the smallest wrong impression, and I do not know whether the hon. Member would think it unreasonable if I asked for an opportunity for finding out tine details. I could not give details

straight off, though naturally I have been looking into the question pretty closely.

Mr. Holdsworth: With regard to clothing, how far are the Government prepared to stop their own Department, the Ministry of Supply, requisitioning wool at a certain price and re-issuing it at from 3o to 4o per cent. above that price? That enters into the cost of living. Will the right hon. Gentleman inquire from his fellow Cabinet Ministers as to how far the Government themselves, by that kind of action, are putting up the cost of living?

Sir J. Simon: I do not think matters are quite in that form, but there again, if my hon. Friend will allow me, I will look into the matter closely and let him have an answer. There can be no question as to our intentions. Raw wool is an enormously important material, for fighting purposes, for export—tremendously important for export—and for home consumption, and the policy which we are following with all our might is to get, if we can, all our wool distributed for the purpose of serving those three purposes in their proper proportion.

Mr. Craven-Ellis: Have the committee that has been considering this question formed any opinion as to what is to be the limit of this form of State contribution? We are out to avoid inflation, and the intention now is to reverse the machinery, and in that way, instead of having a higher cost of living, we shall have to have higher taxation, and the effect of that, if it is carried too far, will be that the higher taxation will be a bigger burden than the higher cost of living.

Mr. Speaker: The hon. Member is going rather beyond the question.

Mr. Woodburn: In considering the question of the two ends of the string that may cause a breakdown in this arrangement, will the right hon. Gentleman have inquiry made into the tremendous cost of distribution in this country, with a view to seeing what economies can be effected there which will lessen the burden at both ends of that string?

Sir J. Simon: That very important question will no doubt come into whatever Debate we have hereafter, but I would remind the hon. Member that one of the


reasons why the Government are acquiring the original overseas supply is in order that they may be able to control it in the course of its passage to the consumer.

Mr. J. Morgan: Are there any offsets to this cost to the Treasury, such as profits on sugar, or is the Treasury also considering the abandonment of food taxes?

Mr. Stephen: In considering this question, have the Government considered the appropriation by the Government of the social credit which is at present being taken by the banks?

Sir J. Simon: I always find social credit an extremely difficult term.

MESSAGE FROM THE LORDS.

That they have agreed to,

Czecho-Slovakia (Financial Claims and Refugees) Bill,

Gas and Steam Vehicles (Excise Duties) Bill, without Amendment.

Amendments to,

India and Burma (Miscellaneous Amendments) Bill [Lords], without Amendment.

Orders of the Day — INDUSTRIAL ASSURANCE AND FRIENDLY SOCIETIES (EMERGENCY PROTECTION FROM FORFEITURE) BILL.

Order for Second Reading read.

4.8 p.m.

The Attorney-General (Sir Donald Somervell): I beg to move, "That the Bill be now read a Second time."
When an individual falls from a certain level of financial circumstances to a lower level, one of the matters of concern, and in certain cases, it may be, of growing concern, is the question of any life or endow merit policy which he may have, and his anxiety is directed to the question whether he will be able to keep that policy in existence owing to his reduced financial resources. The purpose of this Bill is to deal with part of that problem. Right hen. and hon. Members who have interested themselves in this question will have noted an answer which I gave recently, on 18th January, with regard to this point. I set out in that answer the main lines of arrangements that have been come to with insurance companies which do business other than industrial insurance business. The actual terms of that scheme are, of course, not relevant to this Bill. At the time that I gave that answer, I also said that, in the case of industrial assurance policies and assurances with registered friendly societies, discussions had taken place, and it was proposed to introduce legislation in the near future.
This Bill is the legislation which I then anticipated. It makes, as the House will have seen, special provision for, and gives special protection to, the industrial policies and certain similar policies which, as is very well known, are usually taken out to cover funeral expenses—not always though, but that is the bulk of industrial insurance business; and, as the House will no doubt know, the broad definition of industrial assurance is life policies, endowment policies, the premiums of which are collected from door to door. It is felt that, with regard to that class of policies, industrial policies with a limit of under £50 it is desirable to give special protection. I am well aware, from a number of Questions that have been addressed to me since the war broke out,

of the interest taken in this subject by Members in all parts of the House, and of their anxiety that the matter should be cleared up and the Government's decision taken on it. I think they at times suggested that there was some delay. I hope the answer which I gave, and to which I have referred in passing, in regard to insurance policies generally, and the introduction of this Bill, will satisfy—

Orders of the Day — ROYAL ASSENT.

Message to attend the Lords Commissioners.

The House went; and, having returned,

Mr. SPEAKER reported the Royal Assent to:

1. Czecho-Slovakia (Financial Claims and Refugees) Act, 1940.
2. India and Burma (Miscellaneous Amendments) Act, 1940.
3. Gas and Steam Vehicles (Excise Duties) Act, 1940.

Orders of the Day — INDUSTRIAL ASSURANCE AND FRIENDLY SOCIETIES (EMERGENCY PROTECTION FROM FORFEITURE) BILL.

Question again proposed, "That the Bill be now read a Second time."

4.22 p.m.

The Attorney-General: I was saying that I hoped that hon. Members who had interested themselves particularly in this matter would realise that the Government have not been idle, but have endeavoured by discussions with the very large number of companies and societies and so on involved to provide a workable scheme which would give adequate and reasonable protection as far as financial considerations allow. Although so far as ordinary insurance business is concerned that is being dealt with by a voluntary arrangement, in the case of industrial insurance as the House knows that is subject to statutory control under the Act of 1923, and legislation of some kind would have been necessary in order to give the necessary powers to the companies and friendly societies. There being already this statutory code applying to companies, it is more satisfactory to set out the whole scheme in a Bill, although possibly some of the particular provisions of the Bill might be acted


upon by agreement without the statute. With those few words of preamble the best thing I can do is to expound the Bill quite shortly going through it Clause by Clause.
Clause I sets out the classes of policy to which the Act applies. It applies, first of all, to policies of industrial insurance. Those are policies where the premiums are collected from house to house at certain intervals of time. That can be carried on by companies or registered friendly societies which are registered as collecting societies. There may also be cases of policies to which it is desirable to give protection, policies which are effected with collecting societies although they do not in those cases actually collect the premium. Those are covered by paragraph (b). Then there may be policies effected with friendly societies which are not registered as collecting societies—where, ex hypothesi, the premiums are not collected. There may be some such policy—a premium or when there is a separate life, a separate life policy—where protection is desired. That is not industrial insurance business and does not come under the Act of 1923; therefore, it is desirable to bring this in, and that is a slightly different matter. The chief difference arises because, with regard to (a) and (b), under the existing law, if the society or company intends to forfeit, under the Statute it has to serve a notice, and we use that statutory provision for the purpose of this Bill, as will be seen in a moment. The policies which are brought in under (c) are not at present subject to any provision of the statutory notice, and therefore there has to be a special provision for notice.

Mr. Glenvil Hall: Notice of arrears.

The Attorney-General: Yes. With regard to (a) and (b), if a company desires to forfeit, it has already to serve a notice of forfeiture, and the scheme in the Bill is to add to that notice a notice of rights under the Bill. In (c) no statutory notice has to be served in respect of policies, and therefore we must have a special provision in regard to that. I know this is a little technical, and I thought that if I gave that exposition, it would enable the House to follow the remaining parts of the Bill. The Bill protects policies for an amount not exceeding £exclusive of any bonus, which were effected at least

two years before 1st September, 1939. There was a similar but more limited provision in the last war. Until a policy has been going for two years it really has no surrender value.
Under Clause 2 we have the provision under which the policy holder is given notice of his rights under this Bill. Subsection (1) in Clause 2 provides that if and when notice of forfeiture under the old Act is served, that notice is to contain a statement telling the policy owner of his rights under this Act. His rights are that if he is unable to pay the premiums on which the notice of forfeiture is based owing to war circumstances, then he can apply for protection under the Act. Sub-section (2) is put in merely to meet cases which arise from time to time where premiums are being paid, not by the policy owner himself, but by someone on his behalf. Sub-section (3) provides that if the company or collecting society refuse the application, that is to say, if they say they are not satisfied that a policy holder's circumstances are such as to entitle him to the protection of the Bill, then the applicant has the right of appeal to the Industrial Assurance Commissioner. The machinery for those appeals is dealt with in Clause 6, and I will say a word or two about the procedure when I come to that Clause. Subsection (4) deals with the period pending a possible appeal, and Sub-section (5) says what the protection is. This is an important part of the Bill. It states:
Where an application under this Section is granted, whether by the company or society or the Commissioner, then, subject to the provisions of this Act relating to the determination of protection, the policy shall not be forfeited for the default to which the application related or any subsequent default in the payment of premiums and no further notice shall be served under Section twenty-three of the Industrial Assurance Act, 1923.
The question of the determination of protection comes under Clause 4, and I will deal with it when I come to that Clause.

Mr. Garro Jones: Would the right hon. and learned Gentleman say why the Industrial Assurance Commissioner is the official chosen to adjudicate on whether or not a policy holder is financially affected by the war? In no other case has the decision on that been given to any other official than a judicial officer subject to an appeal to a higher court. How is the Commissioner to obtain the facts? I am all the more concerned upon


this point because the Industrial Assurance Commissioner is an individual, as we have shown, who, if he behaves himself with reference to insurance companies for the whole of his term of office, may obtain on retirement a directorship with the Prudential or some other insurance company.

The Attorney-General: This matter and the question of the best machinery for working it have been the subject of fairly prolonged discussions, not only with the companies, but with the friendly societies and others concerned. It was thought that the Industrial Assurance Commissioner, who, as the hon. Gentleman knows, has a very wide knowledge of all aspects of this question, would be the appropriate officer. If the hon. Gentleman takes the opposite view, he will have opportunities of debating it. I should have thought it was really quite wrong to suggest that an official who had a duty of this kind placed upon him by Parliament would be influenced in making his decisions by the prospect of whether or not he will ultimately, when he retires, get an offer of this or that post, and whether he might or might not he allowed to take it. The hon. Gentleman obviously is raising a point of principle, and we cannot discuss it by question and answer in the course of my speech. I have noted his point, and I have told him that as a result of discussions it was felt that the holder of this office was a suitable and proper tribunal.

Mr. Garro Jones: Would the right hon. and learned Gentleman stand at that Box and say that he would be content to allow any other judicial functionary in our legal system to be laid open to the temptation during his period of service so to adjudicate on points of law that he would be more likely on retirement to be open to appointment to commercial directorships?

The Financial Secretary to the Treasury (Captain Crookshank): I do not think questions of that sort ought to be raised by the hon. Gentleman, making imputations in this House on an official appointed to such a post. If the hon. Gentleman has imputations of that sort to make, let him make them at the proper time. I am responsible to this

House for the Industrial Assurance Commissioner, and I resent this sort of suggestion being made.

Mr. Garro Jones: If the right hon. and gallant Gentleman is responsible for the Industrial Assurance Commissioner, is he also responsible for withholding permission for him, when he has finished his career, to accept directorships?

The Attorney-General: There must be many cases in which people in the service of the Crown have, in the course of their careers, to decide questions against one side or another, and there is always the possibility that when they conclude their service to the Crown and retire, they may be able to take other work. There must be countless occasions on which people are having to take decisions which may adversely affect, let us say, organised labour or insurance companies. It is possible, if one is looking for improper motives, to suggest that if those people look far enough ahead, to the time when they will retire, they will say, "I will not do my duty, because if I give an improper decision, I might be provided for later as a result." I resent that suggestion. After discussions with the insurance societies and trade unions, it has been felt that this gentleman was to be trusted, and is an acceptable and proper person to deal with appeals.

Mr. Buchanan: Are the trade unions involved?

The Attorney-General: I am told that, as very often happens, informal discussions took place before this scheme was decided upon, and I understand—no doubt I shall be corrected if I am wrong—that all those with whom discussions took place agreed that this gentleman was a proper person for the post.

Mr. Buchanan: Where did the trade unions come in in the discussions which took place?

The Attorney-General: I cannot tell the hon. Gentleman that, but I understand that discussions took place with the Trades Union Congress, or, at least, with trade union representatives.

Mr. Buchanan: Yes; but the trade unions are not affected under this Bill because they pay benefits. They are not affected like friendly societies.

The Attorney-General: No; but it is not unusual that any matter which affects organised labour should be discussed with representatives of organised labour, to get their opinions.

Mr. John Wilmot: Were the discussions with the trade unions conducted with them in their capacity, as it were, as representatives of policy holders?

The Attorney-General: They were consulted as persons interested through their members in the general questions dealt with by the Bill.

Mr. Shinwell: This is becoming rather a strange Debate, but as everybody is chipping in, perhaps I might have a chip myself. The fact is that there is a very large body of industrial insurance agents—about 25,000 of them—organised in a trade union, and they have consulted the Trades Union Congress in connection with this Bill. That body has endorsed the view that it expressed, that this Bill was quite satisfactory. As the insurance agents are concerned not only with their own pecuniary interests but also with maintaining as large a body of policy holders as possible, they believe this to be satisfactory.

Mr. A. Bevan: Mr. A. Bevan rose—

Mr. Speaker: I must ask hon. Members to conduct the Debate in a proper way.

The Attorney-General: Clause 3 of the Bill—

Mr. Bevan: Perhaps hon. Members might be consulted, now that all the other people have been consulted.

The Attorney-General: That is what I am doing now. It is not a bad thing, I suggest, to take such steps as one can to inform oneself about such subjects as this before coming to the House with a Bill. Clause 3 deals with what happens when there is a default in the payment of any premiums and protection is granted in respect of the default. Paragraph (a) deals with the position when before the expiration of the period of grace a claim arises. The claim is paid, less any premiums which are in arrear and have not been tendered before the claim arises, with interest. Paragraph (b) deals with what happens when the policy is for the whole term of life, maturing on death, and is in force 'at the expiration of the

period of grace. If during the year premiums have not been paid when the war or the period of emergency, comes to an end, what happens is that the policy holder, if he is able to do so, can pay up the arrears. If he pays up all the arrears, it is as if he had never been in arrears at all. But if he does not pay up all the arrears, or any of them, there is a deduction naturally from the original value of the policy. That is arrived at, according to the age group, by multiplying the unpaid premiums by a multiplier which occurs in the Schedule. That has been calculated by actuaries, as the actuarial equivalent of the unpaid premium. In the case of an endowment policy, the procedure is somewhat different. Take a policy maturing at 60. If the war has been going on two years or longer, without premiums being paid, you add that period on to the original age at which the policy should mature. That seems a satisfactory and sensible arrangement. If he is able to pay all the arrears interest will not be charged.

Mr. Wilmot: He resumes his status?

The Attorney-General: He resumes as if he had never defaulted or been in arrears. Sub-section (3) of Clause 3 is an enabling provision, in case difficulties arise in applying the statutory rules. We cannot foresee exactly what will happen, but undoubtedly rather difficult questions might arise in the application of those rules. If a policy has been protected and the period of protection comes to an end the man pays no more than he has forfeited under the ordinary law but this has been put in perhaps ex abundanli cautela so that if there are unfairnesses in applying the original rules they may he adjusted.

Mr. Glenvil Hall: Is the right hon. and learned Gentleman going to reply to the Debate? If not, the only way for us to bring up points is by interjecting as we go along. On this matter I think there are several points with which the right hon. and learned Gentleman might be asked to deal.

The Attorney-General: I think I had better leave it that either my hon. and learned Friend or I will reply. If a number of points are likely to be raised, of course, there will be a reply. Anyhow, I can reply as shortly as the points


raised permit, and perhaps it will be simpler if I now go on with my disquisition.

Mr. Bevan: Will the Attorney-General speak in English and not in Latin, so that we can understand him?

The Attorney-General: Oh, yes; I will translate "out of excessive caution." Clause 4 deals with the determination of protection and gives the insurance company or friendly society the right, if it comes to their knowledge that circumstances have changed and premiums can be paid without hardship, to refer the matter to the Commissioner, and, if he is satisfied, then the period comes to an end. Clause 5 is the retrospective Clause which makes this Bill retrospective to the beginning of the war. It provides, if a notice of forfeiture has been served and is in course of operation at the passing of the Act, for the cancellation of such notice as if it had never been served. If, since 3rd September, a notice has been served, the period has elapsed, the premium is unpaid and the policy is forfeited, a man can apply within three months to have the policy reinstated if he desires and he proves his hardship. That really is a statement of the substance of Clause 5.
Clause 6 deals with the hearing of appeals. The Commissioner will have the power that he has under Section 68 of the Friendly Societies Act, 1896, to take evidence on oath and to require the attendance of witnesses, and the appeal will be dealt with by him, as disputes, referred to him under that Section, are dealt with under the present law. Clause 7 is a Clause which is necessary to deal with the class of policies which fall under Clause 1 (c). As I explained to the House, the statutory distinction between thee policies and the others is that, under these policies there does not, under the present law, have to be a statutory notice if the friendly society desire forfeiture. We have had to make special provision for notice, and no doubt there never would be a forfeiture without a notice, so that it is not imposing any new hardship upon them, that, when they serve the non-statutory notice, which they would serve according to ordinary custom, they will, under the Bill have to add to it notice of the rights under this Bill. Clauses 8, 9, 10 and 11 are formal. Clause 12 provides that the Act shall be

read with the other Industrial Assurance Acts, which will incorporate the provisions that make it an offence if those concerned do not comply with the provisions of the Act. I am conscious that this is rather a technical and complicated subject, but I trust that I have explained the broad lines of this proposal which, I understand, is welcomed in most quarters, and I hope that the House will give the Bill a Second Reading.

Mr. Bevan: May I put one point to the Attorney-General? On a Bill of this kind, which is very complicated and affects so many people, those of us in the House of Commons who have not had the benefit of legal training ought to have had the benefit of a memorandum attached to the Bill. There is no White Paper in the Vote Office and there is no memorandum attached to the Bill, and will the learned Attorney-General bear that fact in mind in future?

The Attorney-General: Yes, Sir.

4.51 p.m.

Mr. Rhys Davies: I feel very nervous somehow in rising to speak to-day. There is quite an array of lawyers opposite, and I am surrounded, too, with very eminent members of the legal profession on my own side; and, belonging to a very humble race, I am therefore more nervous than usual. I am speaking, of course, on behalf of the Opposition who have considered this Measure. We regard it as a useful and a necessary Bill, although we are not quite satisfied with every detail of the Measure. We are anxious that the national emergency should not destroy the financial basis of any of our institutions, and to that end we shall not oppose this Bill.
The Government, insurance companies, collecting societies and the trade unions covering insurance agents all welcome this Measure. There is only one class of person affected that has not been and could not be consulted and that is the policy-holder. It is the duty of Parliament therefore to see that while we could not consult the millions of policyholders we should try to safeguard their interests, and the Opposition feel disposed to put two or three criticisms of this Measure on their behalf. If a Bill of this kind were presented to Parliament in normal times we would have raised some very fundamental issues about the


business of industrial insurance as a whole; we would have had something to say on the recommendations of the Cohen Committee of 1934 and some criticisms on the whole financial arrangements of this colossal business of industrial insurance in this country. We would also have had something to say about the appointment of some gentlemen upon the directorate of some of these companies but all that must wait until some other occasion. If this were the occasion, we would have liked to have said something about the ownership and control of these vast institutions dealing with insurance, but that of course does not belong to the Bill.
There is one fundamental weakness in this Bill. I see the Financial Secretary to the Treasury present and it is to him that I direct this suggestion. This Bill will safeguard the policy-holder from forfeiture because he cannot afford to pay his premiums. I suppose that the largest number of policy-holders affected will be men in the fighting forces. It seems to me to be a very strange anomaly that men who are fighting the battles of this country are receiving allowances which are so infinitesimal that they cannot afford to pay 3d., 4d. or 6d. a week to keep their insurance premiums alive. The position is, that in any benefit accruing under this Bill to that kind of policyholder the financial liability is inevitably thrown upon other policy-holders. All we are doing therefore is to compel the vast majority of policy-holders to support the other smaller number of policy-holders who are suffering hardships owing to the war. It is the poor assisting the poor, as is too often the case.
I now turn to the details of the Bill. The right hon. and learned Gentleman, although a very clever lawyer, did not refer to the differences between the provisions of this Measure and those which safeguarded industrial assurance policies during the last war. One of the provisions of the 1914 Act was that the maximum value of the policy was £25; on this occasion it is to be £50, and that is all to the good. But why is there any figure put in at all? Then, in the 1914 Act, although £25 was the maximum, insurance policies covering all sums were immune from forfeiture. How comes it that that difference is made against the policy holder under this Bill? I know

that the insurance companies will say, "You must not make it too easy for the policy holder; we found out during the last war that people who could afford to pay premiums did not do so and thereby took undue advantage of the insurance companies under the 1914 Act." I agree that there is a very strong point to be made on that score. Nevertheless, I have yet to learn that any insurance company or collecting society suffered financial difficulties by the wider arrangement made during the war of 1914–18. I ask the right hon. and learned Gentleman therefore whether it is not possible to eliminate the £50 altogether. The sums insured are not very large anyway; most of them are from £20 to £100 maybe. The right hon. and learned Gentleman will know that before any benefit is paid on a policy the insurance company takes care to deduct all arrears of premiums due from the death benefits, plus 3 per cent. compound interest on those arrears. We do not see why, therefore, there should be any amount stipulated at all. All industrial assurance policies should be covered on the principle that the companies are safeguarded by deducting arrears due before they pay any benefit.
I now come to the second important point, of the procedure to be adopted under the Bill. The insurance company will send a notice to the policy holder and within 28 days the policy holder in turn will appeal to the insurance company stating that he is suffering hardship. I do not want to be critical of insurance companies at all in saying that their decisions may not be fair. I am assured that the insurance agent will, in the very nature of his work assist the policy holder in making the appeal to the insurance company. So far so good. But see what happens next. Supposing an insurance company says to a policy holder "You have not made out your case?" Hon. Gentlemen know as well as I do that there are millions of people in this country who have not the remotest idea of how to frame an appeal to any Government Department. The insurance agent will hardly assist in that case. I ask the right hon. and learned Gentleman how is the average person, the wife of a man serving in the Forces, ordinary people up and down the country in small towns and villages and little urban districts, to make an appeal to the Industrial Insurance Commissioner in London? It would be a


most difficult task as far as they are concerned. I guarantee in advance that most of the appeals on that score will be dropped, merely because the position will be an obviously difficult one. A point has been raised as to whether the insurance commissioner is the right person to decide an appeal of that kind. I think I accurately state the views of the Committee of our party which discussed this Bill and decided upon our policy when I say this much. To commence with there is a nasty feeling abroad about a previous insurance commissioner being appointed a director of the Prudential Insurance Company within three months of his retiring on a pension from the service of the Government. That has left a nasty taste in the insurance world; there is no doubt about that. I am not so sure myself, however, that to hand these cases to the courts and the legal profession is any better than leaving the insurance commissioner to decide the issue.

Mr. Buchanan: As I understand it, if this gentleman is not going on circuit it will be nearly impossible to appeal. If you made it a local appeal it would mean that a Glasgow person who appealed would appeal to the Sheriff Court and get a hearing on the spot. I should be glad if the Attorney-General can tell me how tins gentleman can hear all these cases throughout the country?

Mr. Rhys Davies: That is a point which the right hon. and learned Gentleman will probably take into account; but what I want to say is this: if all the National Health Insurance societies and their members became the subject of legal controversy in the courts I am sure a large sum of money would be wasted. There is a lot of money wasted on the law on workmen's compensation, but I am not going to argue about that at this stage. My personal view is, however, that if these appeals fell into the hands of the legal profession and the courts I am not so sure that the decision would be any more favourable to the policy-holder than the one to be given by the Industrial Insurance rice Commissioner. I should be glad, however, if the right hon. and learned Gentleman, or his deputy, can tell us if these cases will be heard locally; there is a strong case to be made out on that score.
Now let me come to the next point. We are not at all satisfied with the two

years' provision. There are approximately 10,000,000 policies effected annually in this country; and during the first 12 months about 4,500,000 lapse. I think it is true to say that industrial assurance finance is very largely based on lapsed policies. The appeal I am making to the right hon. and learned Gentleman is this. If we cannot get the two years' provision wiped out altogether will he not consider whether all policies that were effected one year before the outbreak of war shall be included in this Bill? I will tell him why. When a person has been paying premiums for two, three, four or five years he is more likely to continue paying the longer he persists. Take the case of a man who in June last year took out a policy for 6d. a week. War was declared in September and he was called up. In such a case he is much more likely to allow his policy to lapse than if he had taken it out two or three years before the war started. The longer he pays his premiums the greater his reluctance to allow the policy to lapse. Consequently, it is much more agreeable to the insurance companies that the period shall be two years rather than one, or less. I have not very much more to say except to add that we are not quite certain, either, about this 28 days' notice. Notice has to be sent to the last known address. I live in Lancashire and know that people have been evacuated to St. Anne's, Cleveleys, Blackpool and other places; and I can conceive of a case failing to make good by the mere technicality of the notice not reaching a person in time. I wonder whether the Government will consider an extension of the 28 days period.
We are not going to oppose this Bill because, as I said, we think it is a necessary Measure. Insurance agents, in particular, want it because they would like to keep all their policies alive during the period of the emergency. This Bill will, naturally, have a very wide application. It will cover not only men in the fighting Forces but professional men who are out of jobs—architects, surveyors, mechanical engineers, little business folks, and the like, who have never earned a penny piece since the war broke out. In fact, some of these people are in a worse predicament than if they had been one of the ordinary insured unemployed. To sum up, these are the points we are a


little critical about. Two years is too long; there ought to be a shorter period in order to cover a very much larger number of policies. The £50 maximum should be deleted; there should be no figure at all, especially in view of the fact that the insurance companies deduct all arrears of premiums from any benefit paid. The companies are safeguarded further; arrears have to be paid if and when the man returns to work.
I do not think I have exaggerated the position, and I trust the right hon. and learned Gentleman will take note of the few criticisms we have made and that we shall fashion this Bill in such a way that the companies, collecting societies, and even insurance agents, will not suffer. We want, above all things, to see that the policy holders get a fair deal, and to that extent we shall support the Measure.

5.7 p.m.

Mr. Glenvil Hall: I realise that this is an agreed Measure and that such changes as we may seek to effect can be brought forward when we reach the Committee stage. But I would like to reinforce what the hon. Gentleman on the Front Opposition Bench said when he indicated that we on this side of the House think the limit of £50 somewhat low. We see no reason why it should not be doubled, because, although it is possibly true that the Bill deals in the main with friendly societies and industrial insurance, where the average value of the policy is not more than £16, £17, or £20, there are obviously occasions when people who have policies might not come within the scope of this, although justice demands that they should. I want, in the few observations I propose to make, to ask one or two questions to which I shall be pleased to have an answer. The learned Attorney-General did mention when he came to Clause 2, Sub-section (3) that the
Commissioner shall, if he is satisfied that the application ought to have been granted, make an order requiring the company or society to endorse the policy to the effect that it is a policy protected under this Act.
Those words, it seems to me, put into the hands of the Commissioner the right to say, after the company has either rejected or acceded to the claim against forfeiture, that this does come within the terms of being due to war service or comes outside them. You are putting into his

hands a tremendous power which usually resides only in the courts, and it is another instance of legislation by reference and the putting into the hands of civil servants powers which should properly reside in this House or, through this House, with the law courts. The same point, in a different way, arises in Clause 3, Subsection (3), of the Bill. I would like to ask why it is that these considerable powers are left in the hands of the Commissioner? Would it not be proper to put at the end of the Bill a Schedule similar to the one now there in order that it should not be left to him to decide? A table of factors should be set forth to which he must go when he is coming to a decision as to what is the value of the policy in question. I think it is unfair that both in this Sub-section and that referred to by the hon. Member for North Aberdeen (Mr. Garro Jones), such power should be left in the hands of a single individual, and I would ask the right hon. and learned Gentleman to reassure us on that point.

5.14 p.m.

Sir Richard Acland: There is one point I would like to raise on this Bill. It seems quite impossible for any private Member to solve the question by looking at the Bill, but is it expected that insurance companies will actually lose any money over its operation?

Mr. Bevan: No.

Sir R. Acland: One could see certain circumstances in which insurance companies would lose money on a particular policy and others in which they would gain money, such as postponing the date of maturity. The premiums previously paid for two, three, or four years would earn interest all the time before they were called upon to pay benefit. But I understand there is no doubt that on balance insurance companies do not stand to lose a penny piece out of the operation of this Bill. That being so, I am surprised and disappointed at the attitude taken up by the Front Opposition Bench on this Bill, because it seems to me one more small example of how not to run the war. The war is being run on the basis that no private interest must, under any circumstances, lose any money. I do not think you can do it that way. I should have thought that a time of war was a golden opportunity for putting through certain


reforms and taking over the whole of industrial insurance, cutting out wasteful competition and profits at a time when one of our greatest problems, the rise in the cost of living, is going to affect us so greatly. I believe the Government would be able to effect a net saving of millions of pounds to the population of this country.

Mr. Rhys Davies: Do I understand the hon. Member to suggest that the whole of industrial insurance should be nationalised? If so, can we have an assurance that we should have the support of the whole Liberal party vote?

Sir R. Acland: I have spoken on one or two occasions since the war began, and whsle there is no reason why the hon. Member should pay any attention to what I have said, I did my best to make my position quite clear. I have said some things which probably are not in accordance with the official policy of the Liberal party. But with a rise in the cost of living and the possibility of inflation we might at this time and by this policy have been able to save anything up to £10,000,000, which is about one-fifth of what the Chancellor of the Exchequer is having to spend in an effort to keep the cost of living down. I am not convinced that we are going to get out of this war until that principle has been fully accepted by the country. Therefore, I am disappointed that the party above the Gangway do not propose to take up that point.
Having said that, let me put one or two points on the question of two years. If that cannot be shortened to one year, may it not be so altered that the provisions of the Bill will take effect two years after the policy was entered into, whenever that might be? We may have to think in terms of two, three, four or five years of war. If a man takes out a policy on 1st June, 1935, at the end of June, 1941, the provisions of this Bill will begin to affect his policy, so that if after that date he gets called up and is not in a position to pay his premiums, if he has paid his premiums in the meantime, he is then able to apply that the advantages of the Bill should be applicable to his case. There is a small point in Clause r. In the majority of cases where notice is sent out after the passing of the Bill the policy holder is to be reminded of his rights by the insurance

company. That is done, I imagine, because it is assumed that all these policy holders will not know the provisions of the Bill. Would it not be a logical consequence, in relation to those people whose circumstances are as set out in the provisions of the Bill, that the insurance company should be required to send them some kind of reminder, saying that although they have cancelled their policy because the premiums have not been paid during the last few months, they draw the policy holder's attention to the fact that he has certain rights under the Bill? Is not that reasonable? The policy holder otherwise will live in ignorance of the fact that his policy has been cancelled.

5.21 p.m.

Mr. Bevan: There will, of course, be an opportunity of discussing these various points in Committee, but I think it is appropriate to raise one or two matters now. I rise with considerable diffidence, because it seems to me that everybody is agreed on this Bill and that Parliament has just to put its rubber stamp upon an agreement which has been reached by interested parties outside. The right hon. and learned Gentleman repeatedly assured us on this point, and, therefore, I feel that as a Member of Parliament I am rather interfering with the harmony. I agree with the hon. Member for Barnstaple (Sir R. Acland). I hold the view that the insurance system of this country is a vicious one and is having most unfortunate effects upon trade and industry and upon politics. It is exercising an influence upon politics which is wholly bad and upon the financial structure of industry which is becoming disastrous. It is recruiting millions of pounds from the policy holders of the country and investing the money in industry, particularly in debenture shares, and is obtaining an influence on the industrial policy of this country which is wholly bad. Anyone who knows anything about industry knows that it is high time that the whole of this industry was brought under the ownership of the State.
There is no industry which lends itself less to private profiteering than the insurance industry, and no industry which is so protected by the State. The fact that the benches opposite are empty is an evidence that the great insurance in-


terests, which are well represented in this House, consider that the Bill protects their interests. We should have seen a much more animated scene if the Bill really protected policy holders at the expense of insurance companies. I know the names of Members of Parliament who would have been present to see that the insurance companies were adequately defended against any onslaught. I should like to ask the Attorney-General a question on Sub-section (2) of Clause 3. It says:
The interest chargeable on unpaid premiums shall be compound interest at the rate of 3 per cent. per annum with half yearly rests.
Do I understand the position correctly? If it is a policy to make payments on an endowment policy, this provision makes a standstill, and then where the period of grace extends for five years the endowment policy is then automatically extended by five years, and the premiums fall to be paid at the end. Am I right in assuming that the insurance company is entitled to charge 3 per cent. compound interest on the unpaid premiums for five years?

The Attorney-General: No. The 3 per cent. compound interest arises only under paragraph (a), that is, when there is an actual claim.

Mr. Bevan: It arises where a claim falls due, and if during the period of grace the endowment falls to be paid, then 3 per cent. compound interest shall be charged upon the unpaid premiums. It means that if the period of grace is altered over the two and a half years and the claim falls due to be paid, the 3 per cent. compound interest shall be charged on the unpaid premium of the two and a half years. Why? I do not understand it. The insurance company has had the benefit of the use of other money for those two and a half years.

The Attorney-General: The compound interest does not apply to money which has been paid.

Mr. Bevan: Yes, I have said so. Compound interest is to be paid to the insurance company on premiums which have not been paid. Why? The insurance company during the two and a half years has enjoyed the benefit of the premiums which have been paid. I see the Solici-

tor-General shaking his head. Suppose there is an endowment policy payable at the end of 20 years or on death. Suppose the person has enjoyed a period of grace, but dies, not at the end of the two and a half years, but at the beginning of the two and a half years. The insurance company would have to pay the whole of the death policy. Why should it pay less because the person dies within the two and a half years' period of grace? All that really happens is that the poor fellow has died while enjoying the period of grace. If he had died at the beginning, there would have been no deduction at all. Therefore, the effect of the period of grace is to make an unwarrantable deduction in the amount of payment. Why? I do not follow why it should be so. I can see an insurance company putting up a case, but it does not seem to be as strong a case as that of the insured person.
I rose merely to put those two points, which I should like to have cleared up. I am sure that the insurance companies would be able to show that they had held the money during that period of grace, and they might call it a liability because they had had to hold it ready to pay out. Nevertheless, it seems to me that in this case the insurance companies are having more protection than the insured persons get. Unless the Attorney-General can answer that point satisfactorily, I am afraid there is likely to be considerable discussion of it in the Committee stage.

5.31 p.m.

The Attorney-General: I should like to begin by making a passing allusion to the remarks made by the hon. Member for Ebbw Vale (Mr. Bevan) at the beginning of his speech. He suggested that I had given the House to understand that an arrangement had been arrived at and was being placed before the House. In reply to the hon. Member, it seems that if a Minister, in introducing a Bill, mentions that he has had discussions with people who might be able to help him, then some hon. Member gets up and says, "This Measure is the result of consultation with the interests involved, and it is a procedure which is turning the House of Commons into a mere rubber stamp." On the other hand, if a Minister has not had any such discussions, he is told that it is an insult to the House that he should come to it without having taken the


trouble to find out what the interests concerned think about the Measure. That simple and elementary rule of debae seems to me to be a reply to the hon. Member's observations.
I should like now to make a general observation with regard to the speeches of the hon. Member for Westhoughton (Mr. Rhys Davies) and the hon. Baronet the Member for Barnstaple (Sir R. Acland). They talked about private interests. There is always a certain moral satisfaction in talking about private interests, but I would remind hon. Members that when one is dealing with friendly societies, and so on, one is not dealing with bloated millionaires lolling on the Riviera, drinking champagne and smoking cigars. One is dealing with money in which all the policy-holders have an interest. Therefore, when it is said that in considering this Measure, the House must consider the policy-holders, I quite agree. It is because we have been considering the policy-holders that we have brought forward the Measure. But one has to consider not only those policy-holders who have been adversely effected by the war; one has to consider other policy-holders as well, for they have just as much right to be considered, they are just as much members of the public, and just as much ordinary people going about their vocations. The problem in regard to this Bill—and it is a problem which I hope we have solved reasonably fairly—is to see that, while giving some protection which they would not otherwise have to people who are adversely affected by war circumstances, we do not unreasonably jeopardise the interests of the other policy-holders who are equally entitled to have their interests safeguarded.

Sir R. Acland: If the whole of this business were taken over by the State, and enormous economies thereby effected, no individual would lose any money out of it, and there would be no question of compensation to anyone.

The Attorney-General: If that were done, a very large number of employées, and so on, who are at present carrying on this business, would lose their livelihood.

Mr. Bevan: That is a bad and immoral argument.

The Attorney-General: If the hon. Baronet the Member for Barnstaple thinks

that nobody would be any the worse off if that were done, he is making a mistake.

Sir R. Acland: Nobody other than those employed in the business.

The Attorney-General: The hon. Baronet thinks that the policy-holders might benefit; but surely, we cannot discuss on this Bill whether it would be a good thing or a bad thing for the State to take over the whole of the business at present carried on by the insurance companies and friendly societies. What we have to discuss in the Second Reading Debate on this Bill is whether, under the existing structure, the arrangement is a reasonable one for the policy-holders who are suffering hardship.
Having made those preliminary observations, let me deal with the points that were raised by the hon. Member for Westhougton. He asked why the amount of £50 has been selected. The reason is that it was felt that somewhat greater protection should be afforded, as was done in the last war, in the case of policies for small amounts. In the last war, a flat figure of £25 was taken, but in this Bill we have taken the somewhat larger amount of £50. Under the provisions of the Bill, slightly greater protection is afforded in the case of these policies than is afforded, for instance, under the general scheme of life policies. Consequently, if we give rather greater protection in the case of the small policy, we are faced with the problem of the policy over £50 which is also an industrial policy. How does such a policy come into the scheme, the broad outline of the scheme being this Bill and the arrangement made with the ordinary life insurance company?
I have made inquiries about this. Of course, the complication arises because of the fact that since 1914 Parliament has legislated with regard to industrial policies and has given the industrial policy-holder, whatever may be the amount of the policy, certain rights which the ordinary policy-holder in a life insurance company does not have. The relevant right is that given under Section 24 of the Act of 1923, by which, if a policy has been in force for five years, and in some circumstances for three years, the policy-holder can get a free paid-up policy representing the surrender value. That is not a right which the ordinary person has; although he may get it, it is not a right by Statute. In


fact, all the industrial insurance companies and friendly societies by arrangement grant it in the case of life policies, sometimes after three years, but in nearly all cases after two years. Therefore, the holder of an industrial policy for over £50 has already been given by Parliament, not quite the same, but a somewhat equivalent, measure of protection to that which the ordinary life companies have agreed to give to people under the scheme which I have referred to. It would be difficult and indeed impossible for the industrial companies to say that they would treat policies of over £50 on exactly the same lines as the ordinary life companies treat non-industrial policies. They cannot say that because Parliament has compelled them to give their policyholders certain rights. I think it is not inaccurate or unfair to say that under the statutory provisions the industrial policy-holder having a policy of more than £50 will get a reasonably square deal in that he will get a paid-up policy if he is unable to pay his premiums on account of the war.

Mr. Glenvil Hall: Only after five years, or, with the consent of the company, three years.

The Attorney-General: Actually, I am told two years, but the ordinary non-industrial policy-holder has not got a statutory right. We felt it was right that there should be special and rather greater statutory protection for the small policyholder. The question arose as to what should be done with regard to the larger policy-holder who also happens to be industrial. As I have explained, I think he probably gets as reasonable a deal as the ordinary person who has a life policy with an ordinary company.

Mr. Hall: The point I want to make is this: if the companies are in nearly every case making the limit two years, why not put that period in this Bill?

The Attorney-General: Perhaps I have not made myself clear. The Measure gives a special period of protection from forfeiture in the case of the small policy. The right under Section 24 of the Act is not a provision against forfeiture. It is a provision that, although a policy is forfeited, the holder gets a free paid-up policy calculated in a certain way. I was explaining that it was not thought

right to extend the special measure of protection beyond the amount of £50. That leaves the case of the industrial policy-holder with a policy of more than £50. I have told the House what is the position. Such a man has his statutory rights, and it would be difficult for the companies to treat him in exactly the same way as non-industrial policy-holders are treated under the voluntary scheme, because the Statute has, as it were, butted in and given him certain rights. The hon. Member may agree or disagree, but I think that under that statutory right as it is, the industrial policy-holder whose policy is for more than £50 gets a square deal and as reasonably fair treatment as an ordinary policy-holder would get under the voluntary arrangement.

Mr. Shinwell: Is not this the position? In the case of industrial policies exceeding £50, the provisions that have been made entitle the claimant to receive what in the opinion of the registrar and the actuary ought to be provided. That is the principle underlying the arrangement for policies over £50.

The Attorney-General: Yes. Therefore, I do not think he will be unfairly treated if he is not brought under the Bill, because the Bill gives special protection to small policy-holders. The second question I was asked was whether the Commissioner would go on circuit, and the answer is, "Yes." The third question put to me had reference to the period of two years. That period was taken in the last war and, on the whole, I think it is a fair one. These things have to be decided with reference to legitimate help to people who are suffering hardship and the legitimate interests of the main body of policy-holders. A policy of this kind does not really get any surrender value until after the second year, and therefore, the period adopted in the last war is the one that has been taken this time. One would, of course, like to make it smaller when one has in mind the hardship involved, but when one bears in mind the interests of the other policy-holders, I suggest to the House that the period of two years is a reasonably fair one.
The hon. Gentleman also raised the point that the 28 days might be too short. That is rather a Committee point but I shall certainly look into it. The hon. Member for Colne Valley (Mr. Glenvil


Hall) has raised the question about the £50 limit, and I have tried to explain that already. He also said that Clause 2 (3) gave the Commissioner great power and wanted to know whether I agreed with that. That is a matter which could always be debated but the question here is simply whether the failure to pay is or is not due to circumstances arising directly or indirectly out of the war. No doubt there are possible complexities involved in legal proceedings, which might be avoided by the more informal procedure which the Commissioner can adopt if he has full powers to administer an oath and to take evidence on oath. He is a person on whom Parliament has previously conferred quasi-judicial functions in that he has to decide matters in dispute in connection with the Post Office Savings Bank. He has to examine, for instance, the circumstances of applications for the withdrawal of savings for the benefit of infants. I mention that as a somewhat similar case to this.

Mr. Glenvil Hall: Is that not nearly always a question of fact?

The Attorney-General: I think this would be a question of fact too. I think that an inquiry into the circumstances in which an application is made for the withdrawal of savings for the benefit of infants, is not unlike the class of inquiry contemplated here. That is a matter which might be argued, but we think that the tribunal which we propose here will be satisfactory, and a good many of those who have been consulted take the same view, though probably I should be unable to convince the hon. Member if he takes a different view.

Mr. Buchanan: Do you think that the office will be able to undertake the work?

The Attorney-General: Yes.

Mr. Buchanan: With all the work that is on it at present? Great difficulty is found in getting hearings as it is.

The Attorney-General: I cannot think that there will be many cases in which companies or friendly societies are likely to refuse where the failure to pay is due to circumstances arising out of the war. This is a matter in which one expects sympathetic administration. At any rate the Commissioner is satisfied that he will be able to deal with such applications as may come forward. The hon. Member

for Colne Valley also asked why the matter covered by Clause 2 (3) could not be put into a Schedule. We considered that. We thought of one or two cases which might be dealt with in that way but very complicated questions may arise when you seek to apply the existing rules, say to a mixed life and endowment policy where there has been a period of protection and arrears of premium and the man dies before any other premium has been paid. I quite agree that a wide discretion is left but we felt that it was really better to empower the Commissioner to adapt the existing rules with modifications to the new and not altogether forseable cases which may arise under this Bill.
The hon. Member for Barnstaple asked whether the companies would lose any money. That is a difficult question. Of course they may. The finance of insurance is built up on the assumption that premiums come in, in respect of every life and risk. In this case, during the period of protection, a company may be carrying a number of lives and risks in respect of which it is not getting in any premiums. These are questions on which I would be very loth to be dogmatic, but I would point this out to hon. Members. If the war goes on for three or four years or even for one or two years, and if a protected policy is carried on for one or two or three years and there are arrears and the arrears are then paid up, the policy holder is treated in that case as if he had paid the premiums punctually. But if he had paid them punctually, they would have been earning compound interest for the company during that time. In that way it may be said that some financial burden is placed on the other policy holders.
The hon. Member for Ebbw Vale asked why it should be compound interest. The answer is that the basis of insurance contracts is that the capital value of a policy is built up, not only out of the sum which is paid each year by way of premium, but also out of the interest which those sums earn. For instance, if I pay £100 when I am 21, I believe that would produce something like £400 by the time I am 65, or on my death. The money earns interest and the interest is reinvested and it accumulates for my benefit. Therefore when a company pays a policy in respect of which premiums have not been paid for a certain period,


it is clearly entitled to deduct compound interest. Take a case of half-yearly premiums, for instance. If a man had paid his premium of £5 in June, 1940, the company would have invested it, and it would have earned interest, and that interest would have been reinvested, and the proceeds would help to pay the policy at the end. Therefore, if you ask the companies to pay on policies in respect of which premiums have not been paid for some period, they are entitled to deduct the sum which ordinarily would have accumulated as against that policy, with the premiums.

Mr. Bevan: I cannot have made myself clear. I am sufficiently familiar with insurance to know the application of the principle of compound interest throughout the insurance world, but I am bound to say that I do not see how it applies to the case raised by me. The point which I put to the Attorney-General was this—and it applies only to those cases in which a person dies during the period of grace. If such a person died at the beginning of the period of grace the insurance company would still have been liable for the whole of the death payment. But if he dies at the end of the period of grace then the claimant loses compound interest upon the premiums which have not been paid in the meantime. That seems an astonishing procedure.

The Attorney-General: I do not think it is. When the actuarial calculations are made, it is recognised that if you take a group of lives, a certain number will die each year, according to the age group. A person who died immediately after the period of protection has started, would be one of a group calculated as likely to die then. Therefore claims to that amount would have been anticipated and provided for in the original financial calculations on which the amount of the premium and policy are based. But those calculations do not provide for paying a claim, say, in the third year, in respect of which no premiums had been collected in the mean-time and in cases in which premiums have not been paid, the claims would be for money which had not been provided for in the original calculation. It has not been provided for to this extent—that the premiums not having been paid, have never earned the compound interest which

ordinarily they would have earned, as against the claims in that group.

Mr. Bevan: I can see that.

The Attorney-General: If the hon. Member regards this as a question of groups of lives rather than one of individual lives, I think it will be clear. I have done my best to answer the various questions which have been put, and I hope the House will now allow us to have the Second Reading of the Bill.

Question, "That the Bill be now read a Second time," put, and agreed to.

Bill read a Second time.

Bill committed to a Committee of the whole House for To-morrow.—[Mr.Munro.]

Orders of the Day — TRADE BOARDS AND ROAD HAULAGE WAGES (EMERGENCY PROVISIONS) BILL.

Order for Second Reading read.

5.57 p.m.

The Parliamentary Secretary to the Ministry of Labour (Mr. Assheton): I beg to move, "That the Bill be now read a Second time."
This is a Bill to adapt two systems of regulating wages to the circumstances of war time. The first of these systems is the Trade Boards system, under which something like 1,200,000 people now work. It has been in existence for more than 20 years, and I think it will be admitted that it has been a success in the field to which it applies. It is especially important in time of war that the system should be maintained in effective operation. The second of these two systems, the machinery of the Road Haulage Wages Board is of more recent origin. It was established under the Road Haulage Wages Act, 1938. The conditions of road transport in war time are, of course, very different from the conditions which prevail in time of peace and certain modifications are necessary to bring the scope of this Act into line with present conditions.
The present procedure by which changes of wage rates can be made under these systems requires statutory periods of notice for the various stages, and it takes several months for proposals to become effective. In war time, it may be that impatience at these statutory delays


would lead to action being taken outside the Trade Boards or the Road Haulage Wages Board procedure, and to difficulties and disturbances which might be avoided if proposals could be carried through with more speed. The Bill, therefore, enables the Minister of Labour to modify or to suspend certain provisions of the Trade Boards Acts and of the Road Haulage Wages Act by means of regulations. These changes can be made only for the strictly limited purpose of adapting the machinery to war-time conditions. It will not be possible by regulation to create any new offence, or to increase the penalty for any offence, or to change in any way the system by which minimum rates are fixed by various trade boards, or proposed by the Road Haulage Wages Board, and confirmed by the Minister.
Moreover, regulations will not be made without prior consultation with representative organisations concerned, both on the employers' side and on the workers' side. I should say that consultations have already taken place with the larger organisations concerned, and I am happy to say that general agreement has been reached regarding the nature of the simplifying procedure embodied in this Bill. Briefly, the changes proposed are that each trade board will be allowed to shorten the period of notice of proposals for fixing rates or for revision, provided it is not less than two weeks. At present the period is two months. The trade board will be allowed to reduce its quorum of one-third of the representative members, and at least one appointed member, to not less than one member from each side, and one appointed member.
There is also a point connected with the definition and classification of road haulage workers, which is made necessary by the new system which the Minister of Transport has put into operation. Under this defence permits are issued in classifications roughly approximate to the A, B, and C licences, and provision is now proposed in this Bill for holders of permits to be dealt with as if they held the corresponding licences. The A and B type of permits will come under Part I of the Act, and wages of the workers will be regulated by the Wages Board. This is a point which has been agreed to by those concerned.
Although holders of the C type of permit are not necessarily confined to the

carriage of goods in connection with the owner's own trade or business, as they were in the case of the old C licences, it is proposed in so far as they do confine themselves to their own trade or business, that they will remain, or be brought under, Part II of the Act. This, again, is a matter on which agreement has been reached. Further, C licences, or C permit vehicles operating under the group system devised by the Minister of Transport, will be treated in all respects as C licence vehicles so long as they continue to work in the group, even though they do not confine themselves to their owners' business. I think it will be agreed that this is a wise provision and a necessary measure to enable the group system to work satisfactorily. On that point agreement has been reached with those chiefly concerned. There does, however, remain a small fringe for which appropriate provision must be made, namely, vehicles operating under a C licence, or corresponding permit, which may, in fact, from time to time carry goods for hire or reward for persons outside their own group. It is not the intention of the Minister of Transport that C operators should be able to compete with A and B hauliers. It is very rare for C holders to carry for hire and reward outside the scope of their own group but where there is any evidence of abuse the regional transport commissioners, can, and do, restrict the operator to the conditions of a C licence. The extent of this problem, therefore, is very small, and there is no doubt that we shall be able to find a satisfactory way of regulating for this rare type of case. The matter is now under discussion with the Board and other organisations concerned.
In conclusion, I would like to stress two things. The first is that nothing in this Bill, or the regulations which can be made under the Bill, will affect the freedom of employers and trade unions to negotiate, on a voluntary basis, rates higher than those fixed by a Board, or of taking any case to any arbitration machinery which may be available. Second, I would stress that this legislation is definitely of a temporary character and that it terminates automatically when war-time conditions cease. This Bill does not change any of the fundamental principles on which the machinery of the Boards operates. It merely provides ways in which it may be speeded up to


suit the conditions in which the industrial life of this country now finds itself. I hope therefore that the House will give a Second Reading to this Bill.

6.8 p.m.

Mr. Benjamin Smith: The hon. Gentleman will know that there have been very protracted negotiations on all the aspects he has mentioned coming within the terms of the Bill, but, speaking on behalf of those who represent our point of view, I want to offer a welcome to the Bill. It in no way infringes any Act which is on the Statute Book, but it does facilitate negotiations and will, undoubtedly, check any untoward action through what I will call procrastination. The only aspect I would ask the hon. Gentleman to consider carefully is that which he rightly describes as the "fringe" in connection with the C licences. There is no doubt that, unless it is watched very carefully, these people will be carrying for hire and reward and will be active competitors against other interests. As I say, we welcome the Bill on Second Reading, and hope that the Government will give very early facilities for the passage of the Bill in this House so that the work can be carried out.

6.9 p.m.

Mr. Watkins: There is one aspect of this Measure to which I would like to draw the Parliamentary Secretary's attention. I join with my hon. Friend the Member for Rotherhithe (Mr. Benjamin Smith) in welcoming the Bill. I think it is an excellent Bill as far as it goes, but it has one very serious deficiency. It is true that certain arrangements have been entered into with the trade unions in order that the rates of pay and working conditions of men engaged in the road haulage industry may be properly safeguarded. The Minister spoke about a "fringe" for which arrangements still remain to be made, but I am concerned with another fringe for which this Bill makes no provision. The road haulage industry is carried on, not only by the people who are actually engaged in the movement of vehicles, but by a large number of clerical workers, supervisors and administrative workers for whom neither this Bill, nor its predecessor, makes any provision. When the previous Bill was under discussion the then Parliamentary

Secretary justified it, perfectly properly, by saying that it would produce
a system of fairness as between one undertaking and another.
But complete fairness as between one undertaking and another can only be secured when all the employés, in all the undertakings, are properly covered by similar safeguarding machinery.
The position to-day is that in the road haulage industry there are hundreds, and probably thousands, of men for whom there is little or no trade union protection, and no statutory protection such as is provided for in this Measure. The Parliamentary Secretary said that this scheme would bring about a measure of justice to a large number of people engaged in this very important trade, but I want to ask him whether full justice is given to the workers in this trade if a large number of them are left out of it entirely. What actually happens is that a road haulage undertaker in Scotland, employing some hundreds of clerical and supervisory workers, would not recognise the trade union which sought to represent them, and would not enter into negotiation with the trade union for rates and conditions. The result was that ultimately the patience of the men became exhausted and they threatened to strike in order to get trade union recognition. The undertaking gave way, recognised the union, and a satisfactory agreement was reached. It ought not, in the twentieth century, to be necessary for a group of workers in any industry to threaten to strike before trade union negotiations are entered into. Another instance is that of a firm, and I mention its name—Pickfords—a road haulage undertaking largely financed by the railways, employing hundreds of clerical and supervisory workers. It is not provided for in this Measure. Pickfords, in spite of the railway backing, refused to recognise the trade unions, and the men are entirely at the mercy of the heads of the undertaking so far as pay, hours and holidays and other things are concerned.
I believe the Government consider that trade unionism is a valuable factor in our industrial life. Trade unionism regulates wages and conditions and provides the opportunity for peaceful improvement in an industry, and is generally beneficial all round. But, in this important industry, the road haulage industry, where


the Government have undertaken to provide statutory machinery for settling wages and working conditions, we find that the clerks, supervisory and technical people, for whom I am speaking, are left out. The union of my hon. Friend the Member for Rotherhithe will negotiate settlements for rates of pay for his people, but the foremen and supervisors who control his people have no trade unions to represent them and may receive less in pay than the men they have to supervise. I hope the Parliamentary Secretary will look into this matter and see if the suggestion I am making cannot be carried out.
The Parliamentary Secretary said that this Bill will do nothing to impair the freedom of trade unions to negotiate with tie employers. The trade unions, however, are not allowed to negotiate for clerks with the employers, in a number of undertakings in the road haulage business. At this time of day that is all wrong. There ought to be trade union recognition, trade union negotiations and trade union agreements. I would like the Minister of Labour to look into the matter so that in the whole of the road haulage industry there will be complete trade union recognition and satisfactory negotiating arrangements for governing the conditions of the clerical and supervisory staff as well as the operating staff. This is a point of real substance, and I hope that a satisfactory assurance will be obtained from the Parliamentary Secretary.

6.16 p.m.

Mr. Mander: One looks at any Bill with such a Title as this has very carefully to see whether it limits or interferes with the admirable work which has been done for so many years by the trade boards and more recently by the machinery connected with road haulage wages. I understand the object of the Measure is to make this machinery work more smoothly and rapidly in war-time, and I gather that the Government do not intend to interfere with any of the provisions which are really effective for the purpose of negotiating and maintaining wages. That being so, we naturally heartily support the Bill. The Parliamentary Secretary mentioned that the quorum of the trade board was now reduced to three.

Mr. Assheton: Not necessarily three. That is the minimum, and each board will be allowed to determine the number.

Mr. Mander: Yes, I quite understood that. If that number is thought satisfactory we must leave it at that. I should like to say a word in support of what the hon. Member for Central Hackney (Mr. Watkins) was saying about the necessity for the recognition of trade unions and trade union negotiations throughout all industry and, in particular, the road haulage industry. It is all very well to say that the representatives of both sides are free to negotiate and fix higher rates of pay than are laid down under this procedure, but if one side refuses to recognise the other side the thing is farcical. It is absurd in these days that any employer or body of employers should take up the attitude that they will not recognise the organisations of those whom they employ. I hope that the Minister will, on behalf of the Government, make it clear, not only that these negotiations can be carried on as he said, but that it is the desire of the Government that they should be carried on; also that the Government think it is in the interests of public policy that employers should recognise collective bargaining throughout all the trades connected with this Bill and that they will do all they can to encourage and support them. If he will say something of that kind it will do something to give meaning to the words that he has used, which otherwise have very little meaning.

Question, "That the Bill be now read a Second time," put, and agreed to.

Bill read a Second time.

Bill committed to a Committee of the whole House for To-morrow."—[Major Sir James Edmondson.]

The remaining Orders were read, and postponed.

Orders of the Day — GOVERNMENT CONTRACTS (FINANCING).

Motion made, and Question proposed, "That this House do now Adjourn."—[Major Sir James Edmondson.]

Mr. Deputy-Speaker (Colonel Clifton Brown): Mr. Thurtle—

Mr. Silverman: I think with great respect to my hon. Friend, I have priority to-day on the Motion for the Adjournment.

Mr. Deputy-Speaker: That depends on whether the hon. Member catches my eye. As a matter of fact, he has not caught my eye.

6.21 p.m.

Mr. Thurtle: I desire to give publicity to the case of which I am going to give details as a matter of public duty. The facts must speak for themselves. It is quite possible that there may be nothing more in this case than a certain amount of negligence and irresponsibility on the part of a few public servants, but I think the House will agree, after they have heard the facts, that it is very desirable that the case should be thoroughly examined. It will be common agreement, especially in these days when we are spending such huge sums of public money, that the contracts departments of the Ministry of Supply and any other public Department should be, like Caesar's wife, above suspicion. The facts to which I want to draw the attention of the House are these. There is an old-established firm in the Midlands area which for a considerable time has been supplying water bottles and cooking stoves for the Army. About May of last year the output of these water bottles and stoves was unsatisfactory and the representative of the Ministry of Supply went down to the firm to investigate the reason. He found that the firm was in financial difficulties. It lacked the necessary working capital, and, as it was essential from the War Office point of view that these things should be coming in in a steady stream, the Ministry of Supply went so far as to write to the bank to ask the bank whether it would give the firm additional credit.
I think it will be desirable, in order to avoid confusion, although I regret the necessity for it, to introduce certain names into my narrative, and I therefore propose to do so. The officer of the Ministry of Supply who wrote to the bank asking for this further credit for the firm was Colonel Howell Jones. The fact that he wrote in this way makes it clear that the Ministry was anxious that these things should be forthcoming. The bank declined to advance further credit. The

next stage of development is this. Colonel Howell Jones and a Mr. or Major Macgillivray of the Ministry of Supply happened to meet Colonel Hayley, an officer working at the War Office. In some way or other the difficulties of this firm came up in the course of luncheon. The War Office colonel, Colonel Hayley, when he heard of these difficulties said at once that he knew a man who was an agent for a group which had a large amount of money to invest in such a concern. The agent in question turned out to be a person who is now passing under the name of Charles Kingsley Scott. This was the person who was suggested to the Ministry of Supply by the colonel of the War Office as a man who might find money for this firm which was supplying Government contracts.
The House will be interested in hearing the record of this reliable financial agent, Mr. Charles Kingsley Scott. He was in prison for two years for fraudulent conversion and he had five petitions of bankruptcy against him—two in 1929, one in 1934, one in 1938 and another in 1939. Once, when he was adjudged bankrupt, he paid 2¾d. in the£. After this luncheon, it is clear that the colonel in the War Office reported what he heard to this Mr. Scott. As a result, a meeting was arranged between Colonel Howell Jones, of the Ministry of Supply, and Mr. Scott. Later, Colonel Howell Jones took Scott to the War Office contracts department, where they saw the Assistant Director of Contracts. There is no need for me to mention his name; he can easily be identified. The latter gave assurances that in the event of the company being put upon a sound financial footing the War Office would continue to place contracts with it. The next step was that Colonel Howell Jones, of the Ministry of Supply, instructed its Midlands representative, Major Macgillivray, to introduce this Mr. Scott to the chairman of the firm which required the finance. This, I think, is important and vital. Major Macgillivray, the representative of the Ministry of Supply, saw the chairman of this firm and informed him he had been instructed to do so and to vouch for this Mr. Scott—the man with this record —and told the chairman of the company that he could safely negotiate with him. That is a very strong recommendation in respect of a convicted criminal.
The gravamen of my case against the Ministry of Supply and the point I want the Minister to deal with is this: That they took upon themselves the responsibility of introducing to this firm, which was supplying necessary articles of war to the Service Departments, which wanted finance, as a reliable financial agent a man with a record like this. If they knew nothing at all about him I suggest that it indicates that there was great negligence and ii responsibility on the part of the responsible officials of the Ministry of Supply, and I should like to know what the answer is to that.
Arising out of this introduction by the Ministry, negotiations took place with various people who had finance, but they all proved abortive, and apparently they all proved abortive for the reason that in each case this Mr. Scott wanted to extort from the financiers or from the firm, it does not matter which, an enormous proportion of such profits as might accrue as a result of Government contracts, even going so far on one or two occasions—it may be he had no justification for this—as to stress the fact that he wanted that large proportion of the spoils because there were certain legitimate interests of the Ministry which he had to satisfy. [An HON. MEMBER: "How much?"] Something like 5o per cent. of the profits of the firm. It is not clear from the record whether the Ministry in question was the Ministry of Supply or the War Office, but I understand that the Assistant Director of Contracts, who was at one time under the War Office, was, about last September, under the control of the Ministry of Supply, and that at the time these statements were made about certain legitimate interests of the Ministry he must have been dealing with the Ministry of Supply and not with the War Office. That is really the whole of my story, at least so far as the Ministry of Supply is concerned.
The War Office is not represented tonight. I did speak to a Minister of the War Office this afternoon telling him that I should say something which might involve the War Office, and perhaps you will permit me to make one comment which does concern the War Office. I think the House is entitled to ask for a further examination into the fact that a colonel employed by the War Office took upon himself the responsibility of introducing to the Ministry of Supply as a

reliable financial agent a man who had the record of which I have spoken. I do not know whether he had been in the Army. He has been referred to variously as "Mr. Scott," "Captain Scott" and "Major Scott." I understand that the Ministry representative for the Midlands, in introducing him to the chairman of the firm, referred to him as Major Scott, but I am not certain what his rank may be. I think it is desirable that there should be an investigation into the relationship between this officer of the War Office and this man for this reason: It does not appear that the relationship was just a casual one, because there is the fact that about the time when these negotiations were going on this colonel of the War Office actually gave away the bride of this Mr. Scott at his wedding. That indicates that there was a certain amount of close relationship existing between the two, because I cannot imagine that a colonel in the War Office would give away the bride of a complete stranger.
These are my facts. I shall be very glad, as I am sure the House will be, if there can be a satisfactory and a reassuring reply forthcoming. It may be, as I said to begin with, that the only thing that has happened is that there has been negligence and a certain degree of irresponsibility, and that there is nothing worse behind it; but certainly the House and the country, which is providing these vast sums of money, is entitled to be assured that there is nothing in the slightest degree irregular going on in connection with Government contracts.

6.35 p.m.

Sir William Jowitt: I, too, desire to say something on this matter, because I think it was I who first had some sort of cognisance of it. It arose in this way. The firm of contractors in question came to consult me as upon a legal matter. On these facts coming out I suggested to them that there really was not a legal matter at all, but that it was their plain duty, as there seemed to be a grave case, to allow me to put these facts before the Minister of Supply. They readily consented, and I therefore caused a statement to be prepared which I at once sent in, not showing it to anyone else at all. I sent it to the Minister of Supply. He, I may say at once, received me with the greatest courtesy, and assured me that the fullest investigation would be made,


and in due course, those investigations having been made, it is right that the House should know that the Minister thereupon asked me myself to look at the files. He made me completely free of these highly confidential and secret documents, and therefore in anything I say I am most anxious to avoid saying anything which I should not say. I shall watch the Minister closely, and if I see a slight shake of the head I shall at once move off from the topic which I am discussing.
I may say that I am perfectly certain that the right hon. Gentleman, like every other Member of this House, is most anxious to strike at any form of corruption. There is no question about that. If, therefore, we have a case which looks as though there might be corruption, I suggest it is a very proper thing that in some form or other that case should be investigated—investigated ruthlessly—in order that we may be quite certain that nothing has gone wrong. I will take the responsibility, and I think the right hon. Gentleman will pay some regard to my impression, of saying that having seen these documents I feel that there is a grave case for inquiry. I would rather not particularise further than that. I think that, so far as the officers of the right hon. Gentleman and his Department are concerned, there was no corruption. I think there was grave carelessness. I think, too, that for officers of the Ministry to take upon themselves to introduce somebody as a responsible financial agent without knowing anything about him is a grave matter. But it is fair to remember that this man was introduced to them in, I think, a more or less casual conversation at a club, as my hon. Friend the Member for Shoreditch (Mr. Thurtle) has said, by an official of the War Office, an officer serving at the War Office. That being so, I can readily understand that they would be rather put off their guard. They would not unnaturally think, or might think, that a person introduced under those auspices would at least be an honest man.
With regard to the officer at the War Office I must say this: There has been no such investigation, so far as I know, as was taken in hand by the right hon. Gentleman or under his direction. I do think it a very serious thing—I am saying no more than this, though there is much

more I could say—that an officer serving at the War Office should at a club luncheon introduce to officers of the Ministry of Supply a friend of his as a person who has a large amount of money to invest, and that thereupon the officers of the Ministry of Supply should take upon themselves to go down to the Midlands and introduce this gentleman who was, as has been said, a man with a bad criminal record. I say with a clue sense of responsibility that that matter has not received the investigation it requires. I apprehend that the function of the Director of Public Prosecutions—a gentleman whom I know well, who used to work under my jurisdiction in the old days—is not to conduct himself as though he were an inquiry agent. You must put before him definite facts, make at least a strong prima facie case. I do not for the moment say more than this, that an officer serving at the War Office introduced as a responsible financier a man with a criminal record. Shortly after that we find the officer of the War Office giving the bride away at the wedding of this criminal gentleman. In my view those facts merit the closest investigation and all sides of the House—there will be no difference of party on this—will, I think, desire that they should be investigated, and I take the responsibility of saying that so far as I know that aspect of the matter has not been adequately investigated at all at the present time. Whether there is an explanation I do not know. I have seen no explanation and that I regard as farcical at the present moment.
As I have said, the right hon. Gentleman is as ready and as anxious as anybody to strike at this sort of thing, but he must draw this lesson. Here is a firm in the Midlands making something which is of great importance in the war. The Ministry wanted to give orders, to increase the orders. There was one limiting factor. The factory was there, the plant was there, one thing and one thing only held them up and that was lack of finance. To this very day, at this very moment at which I am speaking, they are still held up by lack of finance. For the last six months the firm have been prevented from making what I believe is a most important article, which the right hon. Gentleman desires to get, simply through lack of finance. What I think is very deplorable is that the firm should


have been left in this difficulty. There are the factory and the plant, and you want the article, and if there is a difficulty of finance let the Minister go in and commandeer the premises, if necessary. If there is a difficulty in finding finance let him take it over himself. For goodness sake do not let us go on month after month with this hold-up, with the machinery and the skilled people standing idle. I know that is the situation at this very time.
I suggest that there is a criticism against the Ministry, and I do earnestly hope that the Minister will see to it—this was not brought to his personal notice—that there is some clear understanding in his Department that where there is a factory with plant and there is the necessity to produce some commodity its production shall not be held up by lack of working capital. If there is difficulty about that, the Minister should either cause the working capital to be found by some really responsible financier or—as I think the better course—take over the factory and see that the article is made. For the rest, I earnestly hope, and I think the House on all sides will hope, that the matter which I have brought to the attention of the Minister in this way will be inquired into. I wrote to the right hon. Gentleman, as he knows, without telling anybody about it at all. I hope that there will be inquiry in some form or another, formal or informal, and also that there will be a far more searching inquiry, extending in particular into the War Office, than there has been up to the present time.

6.46 p.m.

Sir Percy Harris: I support the suggestion made by the right hon. and learned Gentleman that there should be an inquiry. It should be of such a character that it should report to Members of this House. The Parliamentary Secretary must know that the ramifications of Mr. Scott are rather extensive. A gentleman not very well known to me came to me just before Christmas in great distress because of a contract which he had had from the Ministry of Supply. He was from a well-established concern, dating back to 1864, and was a very responsible man and a man of considerable experience. He could not get an article essential to the manufacture of that which he was to supply to the Ministry of Supply. As other contracts were about to be

placed, he very properly went to the Ministry of Supply and pointed out to them the difficulty of getting delivery of the essential part of the article which he had to manufacture.
What was his amazement, when he went to the Ministry, at being sent to a Mr. Scott. He was told that if he only went to Mr. Scott all his difficulties would be removed and his supplies would be forthcoming. Mr. Scott had an address in Piccadilly, and the gentleman in question had great difficulty in finding him. After extensive inquiries he at last found Mr. Scott located, I think, in the office of a theatrical agent. Mr. Scott explained that he did not get paid by the Ministry of Supply, by whom the gentleman had been sent, but had to get his payment from the firm by way of commission. I do not want to elaborate the story, but when the gentleman came to me for advice, I took him personally to the Parliamentary Secretary. I hope the House will think that I acted properly. Let me say at once that the Parliamentary Secretary undertook to investigate the whole matter. A few days later the gentleman got the very sound advice to have nothing more to do with Mr. Scott.
I do not want to go into the details of this matter. It is inadvisable to do so, because it would make the problem only more confused. The very fact that it is possible for an official of a Department to send a contractor to a private agent who proceeds to ask for a commission, not only on the contract in question but on all contracts, shows that there must be, I will not say a little slackness, but a possible leakage, in the organisation of the Department. We know and we recognise that the Ministry of Supply has had to expand very rapidly at a terrific pace. It is quite possible that in an organisation improvised largely since the war it is possible that there may be loopholes; but it is essential that the business interests of the country should have confidence in the Ministry and should feel that there is no possibility of irregularity. In the older Departments that have been built up gradually there are traditions and staffs from which such a thing is not possible. The Minister would be well advised to accept the suggestion of the right hon. and learned Gentleman to have an inquiry by competent persons and, in due course, that the result of their findings should be reported to the House.

6.50 p.m.

Mr. Mander: I intervene only for a moment, because the firm in question communicated with me and asked me to say a few words in support of the hon. Gentleman who initiated the Debate tonight. The firm, as has been said, is in the Midlands. It is well known to me. It is an old-established firm, and I know that over a considerable number of months it has been trying to get finance in order to enable it to make the things that are required by the Ministry of Supply. It has wholly failed up to the present time to obtain it, and we now have before us the story that has been told to-night. The firm has a considerable number of employés, and it is well known for the type of goods it manufactures.
These people say that they are most anxious that there should be a complete inquiry and that they consider the scandal suggested by the question of the hon. Gentleman is of the greatest national importance. Of course, they naturally resent very much being placed in such a position, having been approached by such a person and had a proposition of this nature made to them. Any self-respecting firm would do so. That is their personal feeling; but, in the national interest, it is vital that we should have not only the inquiry which the right hon. Gentleman is most anxious to have—I know that he is desirous of getting thoroughly to the bottom of the matter—but an equally thorough inquiry into the War Office side of the matter, where there has been no satisfaction at all. Nothing has been said at Question Time to-day to indicate that the Government are to take any steps about it. I hope that when the right hon. Gentleman replies he will make it clear on behalf of the Government that they intend to deal, not only with the Ministry of Supply side of the matter, but thoroughly to investigate—I do not know whether by a Departmental inquiry, a Select Committee of this House, or whatever it may be—the extraordinary and alarming story that comes from the War Office.
It would be interesting to know—I think the right hon. Gentleman referred to this matter in one of the answers which he gave to-day—what action of a disciplinary nature he intends to take as regards his own staff. He rather hinted that, as a

result of the grave indiscretion which clearly has been committed by certain officials of the Ministry of Supply, it might be necessary to look at the matter from that point of view. Perhaps the right hon. Gentleman would be good enough to indicate whether he contemplates anything of that kind. I am certain that something of the sort ought to be done on that side at once, and that also there should be the fullest inquiry at the War Office.

6.53 p.m.

The Minister of Supply (Mr. Burgin): May I, in the first place, apologise to you, Mr. Speaker, and to the House, for not being here when this matter came on? I was in the precincts of the House, but I was not aware that the Adjournment Motion had been moved. I would say at once that this is a most regrettable business and that I have every desire to probe it as fully as possible. I think that the best service I can give to the House is to place before hon. Members such facts as are within my knowledge. I would say, in answer to the hon. Baronet, that this is not some new adventure of Mr. Scott's. The hon. Baronet will, I think, agree that the person in whom he is interested was either making a spare part or that this sub-contractor was making it for him.

Sir P. Harris: Perhaps I can make that point clear.

Mr. Burgin: Yes, but may I just finish this point? Upon an inquiry being made about this contractor, the statement was made, "Scott is supplying finance for that firm. Therefore you had better see Scott." I am trying to bring what must have struck the House as a completely new allegation into the remainder of the picture and to show that it was a matter relating to the same contractor and to the same transaction, and that what appears to have happened on that occasion was that an observation was made that Scott was looking after the finance of that contractor. I think it was in those circumstances—I will give way to the hon. Baronet now—that his friend went to Scott.

Sir P. Harris: I think this point is important. What happened is this: He is a manufacturer of a complete article; he manufactures stoves. An essential part


was required, and he could not get delivery of it. He went to the Ministry, where he was told that if he wanted to get delivery, he should go to Scott. Scott said he could get delivery provided that the contractor paid him something.

Mr. Burgin: I imagine that the name of the contractor has not been given. This contractor is a public company with a capital of £120,000. For some time it has been endeavouring to reconstruct its finances. At the time when the first Government orders were placed with that contractor the suggestion was made that perhaps, on the notification that Government contracts were being placed, the company's bankers might provide finance. A communication was made to the company's bankers that the Government were prepared to place substantial contracts. Unfortunately the bank were not prepared to make an advance. From that moment on, various attempts were made to find finance for this contractor company. I entirely agree, if I may say so, with the right hon. and learned Gentleman that finance must not be allowed to stop production. I have, in fact, made a proposal to this contractor that all moneys due to their subcontractors which would otherwise make a drain on their working capital will be paid direct by us. That arrangement is in process of being completed with the sub-contractors and is a method of financing contractors whose finances are weak that we have adopted with success on other occasions. I can at once tell the House that if we are satisfied at the Ministry of Supply that lack of working capital is holding up an essential supply, I shall not hesitate to use the powers given to me by the Act and to go to the Treasury to ask for the necessary powers of finance.
Let the House have some sort of idea of the proportions of what we are talking about. The contracts which this contractor holds are of the order of £38,000 and cover three sets of articles: baking dishes, cooking stoves, and water bottles. The water bottles run into something like 250,000, the stoves into 3,600 odd, and the dishes, etc., into some 4,000 odd. There has been a most unfortunate absence of delivery. As the right hon. and learned Gentleman so fairly said, this is a fine contracting capacity. There is the plant, and there are the people, but

there has been difficulty throughout over finance.
Now let me give the House an assurance. I am not attempting to support any officer who may have committed any impropriety, but I am perfectly satisfied that the one object of anybody in the Ministry of Supply throughout has been to secure delivery of these stoves, baking dishes, and water bottles. It is no part of the duty of the Ministry of Supply to suggest people to finance others and, in so far as any officer has done anything of that kind, it is certainly negligent, if nothing more. I entirely agree. There are three officers, as I understand it, who have played a part in this story. An officer in the War Office, I believe a colonel, was approached by Scott for a commission. The House will understand the approach best when I say that the officer was badgered to fill up forms and to introduce Scott to the Adjutant-General. He seems after a time to have adopted the line of least resistance and filled up a form of recommendation. In consequence, Scott sees a section of the War Office and so becomes one of constant telephone callers and visitors to this officer in the War Office.
As the right hon. Gentleman says, that officer at a club says, "I hear of someone who has finance"—meaning Scott—"who is anxious to be put into some line of country." Another officer in the War Office says, "Well, I can tell him a line of country. There is a contractor firm under contract to supply water bottles that wants finance." Those two War Office officers suggest that Scott should be put in touch with the firm of contractors. Some telephone messages pass, and an officer of the Ministry of Supply, a progress officer in the Midlands, is asked to arrange a meeting at which Scott can meet the contractor. I do not think the officer of the Ministry of Supply had ever previously heard of Scott.

Sir W. Jowitt: I think the right hon. Gentleman will remember that it was these two officers of the Ministry of Supply who met the gentlemen from the War Office at the club. It was to them—the officers of the Ministry of Supply—that the War Office man said, "Does anybody know a good line of country to go into?" and then the officers of the Ministry of Supply said, "A good line of country? Why, what better than


financing this particular Midland firm?" Then they put the officer of the War Office in touch with the contractor. Those are the facts.

Mr. Burgin: Let me deal for the moment with the officer of the Ministry of Supply with regard to whom I thought the right hon. and learned Gentleman was referring. There is a progress officer in the Midlands—a major—who was at all times and is still in the service of the Ministry of Supply. That particular officer was the one I had in mind, because he physically arranged the interview at which Scott met the contractor. I do not want in the least to shirk discussion of any other facts, but for the moment I wanted to point out—

Mr. Thurtle: It is a Major MacGillivray, is it not?

Mr. Burgin: I was not quite sure whether one could give the names of civil servants, but if the name of Major MacGillivray has been mentioned, that' is the officer to whom I refer. If there is to be further inquiry, as there obviously must be, and if matters are going to be inquired into in greater detail, I want to speak with care. Speaking to the best of my recollection—and I have had the whole of these statements carefully taken and prepared by experienced officers—my recollection is that Major MacGillivray was asked to fix up an appointment at which this man said to have funds could meet the contractor said to want funds, and my recollection is that Major MacGillivray went to a hotel in Birmingham, after he had made some telephone arrangements, and that Scott and another man—I believe a man called Beatty—came presumably by train from London. The contractor and either one or more representatives of the contractor firm came, and my information is that Major MacGillivray said, "My business is to introduce you. I am not wanted in your discussion and I shall probably only embarrass you," and he then left.

Mr. Thurtle: Will the right hon. Gentleman permit me for a moment? As I understand it—and this comes from the firm in question—when Major MacGillivray introduced Scott he used this language, "He had been instructed to do so and to vouch for him, and that the company could safely negotiate with him."

Mr. Burgin: The hon. Member is going beyond knowledge that I have. I have no knowledge of language attributed to Major MacGillivray on that occasion, and I think I have accurately summed up the effect of the interview. Of course, language like that would be most important, but I am endeavouring for the moment to give to the House the information such as I have from a tangled set of circumstances, and without wanting to exculpate anyone I wanted to give a fair impression of what I understood to be the part that the officer played. The House should realise that at present two principal officers are in the War Office. The right hon. and learned Member brought this matter to me early in December or at some such time. It was the first I had heard of it at all. I had never heard of the contractor by name, and I did not know any of the parties and should not have known which officers were in the War Office or who were under my control. At once a full and searching inquiry was made—I mean an internal inquiry of a Civil Service character, an inquiry which included as far as possible the officers serving in the War Office—that is to say, their statements were taken after a proper warning of the subject-matter of the statement.
When the whole of those statements had been obtained and the matter had been looked at the papers were then sent to him, as my right hon. and learned Friend says, and he was good enough to communicate with me again, whereupon I had them re-vetted by the Establishment Branch, a department of the Civil Service Department which is responsible for personnel and disciplinary matters within. I felt the report then showed the need for further consideration, and so the matter was submitted to the Treasury Solicitor, and, on the Treasury Solicitor's advice, submitted in detail to the Director of Public Prosecutions. I subscribe to what the right hon. and learned Member said, that in order that the Director of Public Prosecutions can properly go into anything, he must have the materials before him. He had the whole of the material that I could provide, the whole of the documents, statements, papers, and the benefit of the inquiries which we could make. He had submitted to him, not only the question, "Is there evidence of any culpable misbehaviour which would warrant prosecu-


tion either for disclosure of official secrets or corruption?" but also, "Is there in your view any further source of information from which inquiries could be made either by the police or anyone else which would be likely to assist the case for a prosecution?"

Sir W. Jowitt: May I ask the right hon. Gentleman one question? He said that after I had communicated with him he had the matter re-vetted. Was that in regard to his own Department or also the War Office? I ask that particularly for this reason. He will remember that when I communicated with him I said that I thought the internal investigation made in his Department was satisfactory, but I said I thought the investigation made in the War Office was wholly unsatisfactory.

Mr. Burgin: I quite agree. The answer is that the re-vetting was in my own Department. [An HON. MEMBER: "Not in the War Office?"] This is a matter which is involved in detail, and I am anxious to show that I am at one with the House in wanting to get absolutely to the bottom of the matter, but I think we shall do better if we proceed by stages. My Ministerial and Parliamentary responsibility was to exhaust inquiries inside my own Department first; it is then my business to transmit the material I have obtained to my right hon. colleague the Minister responsible for the other Department to investigate in his fold matters concerning officers in his Department. I apprehend that there will be no difference of opinion that that was the right course to take. It was on 29th January, only two days ago, that I received the report from the Director of Public Prosecutions. It is not a document of only a few lines, but a reasoned review of all the evidence. There has not been time for me physically to have acquainted my colleague in any other than general terms of the nature of the matter, let alone of the whole of the evidence.

Mr. Attlee: What was the date when this was brought to the right hon. Gentleman's notice?

Mr. Burgin: I have already said—I think it was mid-December. I have not the date before me now; I am speaking from memory. [An HON. MEMBER: "You said 'early December.'"] If I

said "early December," I will not quarrel about that. As a matter of fact, it was 22nd November. It was 22nd November when the right hon. and learned Member for Ashton-under-Lyne (Sir W. Jowitt) handed me a large packet of papers to investigate.

Mr. Attlee: I do not understand why, if this came before the right hon. Gentleman then, and it involved another Department, that Department was not notified.

Mr. Burgin: Please do not let us get unnecessarily entangled. First, what Department was involved was not known to me any more than it was to the right hon. and learned Gentleman himself. The inquiries were made between the right hon. and learned Gentleman and myself in the fullest agreement, with the absolute assistance of everybody, until near the end of the year. At that time it became clear that two of the three officers principally concerned were in the War Office. It was through War Office assistance and the War Office staff that the statements from those officers were taken upon which the further inquiries have proceeded. The right hon. and learned Gentleman said, "Was the last re-vetting done by me inclusive of the War Office?" It was not. I want to make that clear. Nothing could be more regrettable than that there should be any shadow of suspicion of corruption against any officer in any public Department. I want delivery of these articles. I am satisfied that my officers were trying to get them. There is not a breath of evidence that the officers were guilty of corruption or that any inducement was held out to them at all. Had there been any, my action would have been very different.
I have made a full inquiry into my side of the matter. I hope the House will accept that, and will allow me to communicate the whole of this material to my colleague at the War Office for a similar investigation to be made there. I do not know whether it is possible for the matter to be raised again in a fortnight's time or something of that kind, but I want the fullest investigation made. I am a little diffident, as a Minister in charge of a Department, in promising inquiries in a Department which is not under my control, but I promise the House the fullest possible investigation, and that a report will be made to the


House on the result. We have the same object in mind, to clear everything up, and if the House will allow me to communicate the whole of this to the Secretary of State for War for appropriate action in his Department, on an undertaking being given by me that the result will be reported to the House, I should hope that that would please the House as being a fair method of dealing with the matter.

Sir W. Jowitt: After the right hon. Gentleman had shown me his files, he will remember, I sent him a private report, telling him the impression I had drawn from his files. I drew that up with my own hand, and it took me a great deal of time and trouble. I think the date was about the end of December, or in January. What I pointed out as plainly as I could was that I thought his officers had been negligent, but no worse than that. I thought that, so far as the War Office was concerned, there was a much graver question. I would like to know: When I sent him that report, did he not then communicate it to the War Office? I had seen the result of the preliminary investigation of the War Office. When I sent him that report, surely he communicated it to the War Office, for further re-vetting, when communicating it to the Director of Public Prosecutions.

Mr. Burgin: It was on 2nd January, 1940, that I received the matter, and I submitted it to my advisers in my own Ministry. It then went straight to the Treasury Solicitor and the Director of Public Prosecutions.

Sir W. Jowitt: Not to the War Office?

Mr. Burgin: No. The advice then given to me was to submit the matter to the Treasury Solicitor and the Director of Public Prosecutions. It might well have been, had the Director of Public Prosecutions taken another view, that there was ample evidence for a prosecution.

Mr. Mander: Does the right hon. Gentleman propose to consider taking any disciplinary action, other than what the Director of Public Prosecutions may decide, with regard to members of his own Department, who have acted extremely unwisely?

Mr. Burgin: Yes, there is one member of the Department who has subjected

himself to that action, and that action has been taken. I do not think it is in accordance with practice to go into detail about that, but that action was taken, and taken in accordance with what I am advised is the appropriate course.

7.19 p.m.

Mr. Attlee: This seems to me to show a very extraordinary attitude between colleagues in the same Government. Here we have a serious matter brought before the right hon. Gentleman, who has it investigated at some stage which certainly gave very ample time. It must have become clear to him that the persons involved in this were not only the servants of his own Department, but also the servants of the War Office, and he had heard from my right hon. and learned Friend that in his view it was also a War Office matter. The right hon. Gentleman does not seem to have thought of talking to his own colleague, the War Minister. He seems to have relied on advice from his own Department. We ought to have had a representative of the War Office here to-night to explain what action has been taken in that Department. If this is the kind of co-ordination that exists between Departments so closely connected as the War Office and the Ministry of Supply, I shudder to think what happens between other Departments. One would have thought that a Minister would have written to, or, more likely, have seen, a colleague and said. "I am going to investigate this matter very thoroughly in my Department at once, and I suggest that, as there are officials in your Department involved, you should carry out an inquiry there on parallel lines." We could then have had the whole story before the House this evening. I am surprised that the right hon. Gentleman, at the end of his speech, should ask permission to hand it over to his colleague. I suggest that it is his bounden duty at once to notify his colleague, and we ought to have had a representative of the War Office here to-night to give us the other side of the picture.

7.21 p.m.

Earl Winterton: The speech which the Leader of the Opposition has just made is the kind of speech that all Leaders of Oppositions irrespective of party would make, and he is quite entitled to make it. No one could object to it, but I think it goes slightly beyond the necessities of the case. It conveys a suggestion that there


has been, on the part of the right hon. Gentleman the Minister of Supply, a kind of concealment which I do not think is the case. The right hon. Gentleman, with the greatest frankness, said that he now realises that this is a matter which will have to be investigated by the Secretary of State for War. It is obvious from the speech made in the House this afternoon that that is so, and he has promised that he will convey the information to the Secretary of State for War. And as far as he can bind his colleagues—and I think we can take it as being binding on his colleagues—the expression of opinion given by the right hon. Gentleman is that the whole matter will be investigated and reported again to this House. I think that the Leader of the Opposition will agree that it will be undesirable at this stage to suggest that there is something behind this until we have had the whole story. We have to remember that in this House we are speaking not only through you, Mr. Speaker, but especially at the present time we are speaking to the whole world, and it will be very unfortunate if any impression were given of anything in the nature either of deliberate concealment or mismanagement between the Departments.

Mr. Attlee: The Noble Lord will acquit me of having made any suggestion of concealment. What puzzled me was the relationship between the two Ministries. I cannot see any reason for concealment or anything else, but it really seems so quaint and curious that the matter was not communicated to the right hon. Gentleman's colleague.

Mr. Burgin: May I point out that there were two courses open—to send the papers to the War Office and make inquiries there, or to send them to the Director of Public Prosecutions? I chose, perhaps wrongly—the circumstances will show—to send them to the Director of Public Prosecutions, and I had them back on 29th January. Now comes the moment when I must submit them to the War Office. Had the opinion of the Director of Public Prosecutions been the other way, that in his view it justified a prosecution, no further inquiry would have been necessary at all.

Earl Winterton: The only other point I want to make is this: If the hon. Gentleman opposite who raised this matter,

as he was fully entitled to do, felt that the War Office and the Ministry of Supply were involved in the case, he would presumably have given notice to the Secretary of State for War. I suggest that the question should be allowed to remain on this basis, that the right hon. Gentleman has promised a full inquiry on behalf of the Secretary of State for War, and that until that inquiry has been held it does not seem particularly appropriate to discuss the matter further.

Mr. Thurtle: I would say to the Noble Lord that I took the opportunity after Questions to-day of telling the Financial Secretary to the War Office what I was proposing to do and that I thought that the War Department was involved in the discussion, and it would probably therefore be desirable for the Department to have a representative on the Bench, so that I did as much as I could in that direction. I merely want to say this further word. I think the whole House is very glad to get the assurance from the right hon. Gentleman that he intends to have this matter fully investigated. I would like to ask him whether he feels that he can now make a statement on what is an acknowledged fact in connection with the controversy, and that is, that there was a representative of his Department who took it upon himself to recommend a criminal and a man of straw to a contracting firm as a reliable financial agent, and also whether he does not think that it would be reassuring to the House now if he would get up and say that, as far as that is concerned, it was something which is reprehensible and undesirable.

Mr. Burgin: With the leave of the House, I would say that I agree entirely. It was most reprehensible. I do not want to be committed to saying that he recommended a man of straw. I would prefer the phrase, "He effected the introduction." It is no part of the business of any member of the Ministry of Supply, nor as far as I know of any other Department, to find or to vouch for individuals as good or bad financial agents. It is no part of their business at all, and it is most regrettable that it should happen. It is careless, to say the least of it, and it is wandering out into avenues which have nothing whatever to do with official duties, and I very much regret that it should have happened.

Orders of the Day — ANTI-NAZI PLAY (AUTHOR'S INTERNMENT).

7.26 p.m.

Mr. Silverman: On Wednesday last I addressed to the Prime Minister a Question in which I inquired whether the right hon. Gentleman was aware that the author of the play "Professor Mamlock," a film version of which was having so pronounced a success, not merely in this country, but in the United States of America and other neutral countries as an instrument of propaganda on behalf of the Allied cause, had been interned for many months in a French internment camp under conditions which I described in the Question. I also asked whether the right hon. Gentleman would make representations to the French Government on the subject. I desired to raise the matter, and I gave notice at the time that I would raise it on the Adjournment, because I did not regard the answer given to me as satisfactory.
I understand that there is some doubt as to whether, within the Rules of Order, I am entitled so to raise it, and I want therefore to make this submission to you, Mr. Speaker, in an endeavour to persuade you, if I can, that it is right and proper that the matter should be debated in this way. I fully realise—and I will not go into the merits of the case in any way—that it is no part of the functions of this House, and it would be highly improper and undesirable for this House, to debate the rights and wrongs of an action taken by a foreign Government on its own territory in relation to an individual subject to its jurisdiction. If the matter had stood there, I would not have ventured to think that I had any right to invite the House to debate it, or in fact to invite the Government to make any comment upon it. But I submit to you, Sir, that the question does not rest there. The matters involved—and the Question was framed with direct reference to them—are not solely the concern of the French Government, but are matters which, in the peculiar circumstances which now exist, must reflect adversely upon the interests of this country, both at home and in the wider spheres abroad.

Mr. Speaker: The hon. Member must not go into the merits of the case. He cannot do that on a point of Order.

Mr. Silverman: I am endeavouring not to go into the merits at all, but only saying, I hope, the minimum that is necessary in order to persuade you, Sir, that this is not purely a matter of interest to the French Government, but is one which also vitally affects the interests of our own country. I would have submitted, if I were permitted to do so, that the interests of this country were vitally affected by what has taken place, and that it would be perfectly proper to invite the Government, and for the Government to accept the invitation, to make friendly representations to the foreign Government concerned, fully recognising that it is a matter of some delicacy and not a question that would impugn or criticise that country in any way. I am not suggesting it would be proper to criticise or condemn. But I do suggest that it would be perfectly proper—there are numerous precedents of Members of this House doing so—to request the Foreign Office to use its influence in order to bring about an alteration in something which is taking place in a foreign country where our own vital interests are affected. I am not asking for more than that, but I do suggest that there is ample precedent for it, and I would go so far as to say that if a matter in which our own vital interests are affected is precluded from discussion in this way merely because it is an act of another Government, then the interest of this country goes by default. I hope, Mr. Speaker, I have persuaded you that the vital interests of this country were affected and that I shall be entitled, as any hon. Member has a right to do, to endeavour to persuade the Minister concerned to give a more adequate and more satisfactory answer.

Mr. Speaker: The question the hon. Member has just raised arises, I think, from a Question he put in the House of Commons and the reply he obtained from the Prime Minister which was that the matter was one for which the Government had no responsibility. There is a very sound rule in this House that questions for which the Government have no responsibility cannot be raised on the Adjournment, and I think the House will realise that once we depart from this rule, it might lead to dangerous courses. I think it would be better to stick to the rule that questions for which the Government have no responsibility should not be raised on the Adjournment.

Mr. Silverman: With all respect, I do not want to debate it, because I realise that I must accept your Ruling, Mr. Speaker, once it is finally given, but I do suggest there is a certain amount of confusion. The question of what happened to this man in France is no doubt a question which is not the responsibility of the Government. The only way in which, as I see it, the matter could be out of order would be if I were asking them to do something which they had no legal power to do. But I do not think it is suggested that if I were able to persuade them of the merits of the matter, the Government would not be entitled to make representations. If the Government are entitled to make representations, I submit that it is not out of order for me to endeavour to persuade them to make representations.

Mt. Speaker: If we took that course, it would be a way of getting round the rule. The Government have always claimed that they can make representations to any foreign Government on any subject, but I do not think it is the proper

time to raise the matter on a Motion for the Adjournment.

Mr. Mander: We frequently have discussions on foreign affairs which take place on the Motion for the Adjournment, and in such cases it is quite usual for His Majesty's Government to be adjured to take an interest in countries for which they have no direct responsibility at all, but where it is argued that they might usefully intervene and make representations. If the Ruling you have just given is rigidly adhered to, it will bring to an end Debates on foreign affairs such as we have had recently.

Mr. Speaker: I cannot agree with the hon. Member. The Debates we have had recently have been of a quite different character from this, and on matters for which the Foreign Office and the Government have a large responsibility on the policy which is to be pursued.

Question, "That this House do now adjourn," put, and agreed to.

Adjourned accordingly at Twenty-Four Minutes before Eight o'Clock.